1951-11-13

Mr. George A. Drew (Leader of ihe Opposition):: Mr. Speaker, I think this would be the appropriate time for me to raise a question which I think should be raised. It has been brought to my attention that seven orders for returns, for which motions were passed by this house, are still outstanding. They cover a period going back to the first session of the present parliament, the last of them having been passed on June 25 of this year. Therefore not one of them is recent. I raise the question because it seems to me a practice has developed of permitting considerable delay in the filing of returns after the house has dealt with the questions. If there is any reason why the returns cannot be made, then it would seem that the appropriate time for that point to be raised is when the motion is before the house. However, if the motion is passed then I think everything possible should be done to comply with a motion which members of the house have supported.
One of the reasons why I am impressed with the necessity for consideration of this matter is that when the parliament came to an end there were forty-three orders for returns outstanding. Under our rules, as I understand the situation, with the termination of one parliament these motions and the orders made with respect thereto became ineffective. We have a situation where there are seven outstanding orders for returns going back to November 14, 1949, the date of the first one, and running through at different intervals up to June 25 of this year. I call this matter, through you, Mr. Speaker, to the attention of the government so that there may be a review of the orders outstanding, and I hope that by tomorrow we may have some assurance as to when these returns will be made.


Right Hon. L. S. St. Laurent (Prime Minister):: I fully agree with the leader of the opposition with respect to everything he has said with the possible exception of the word "tomorrow". If he will be kind enough
to let me have a list of these returns I will make it my personal duty to inquire into the matter because I think returns should be brought down with due dispatch.


Mr. J. G. Diefenbaker (Lake Centre):: On a
question of privilege in connection with the same matter, on April 30, 1951, a question in my name was passed as an order for return. The question is as follows:
1.	What lawyers practising in (a) Toronto; (b) Montreal; (c) Winnipeg, have performed legal services or have been retained as solicitors in any department of the government since the 31st of March, 1948?
2.	How much was paid to each of the said lawyers?
That, sir, is six months ago, and while it may be a big job I think it should be completed within that period.


Louis Stephen St-Laurent: I attended to that particular matter on three or four occasions and endeavoured to have the returns prepared in the various departments in the same form so they might be rather comparable. I inquired about it around a week ago, and I hope that we will have it completed. As the hon. member says, it requires a lot of research work. It is done by different officials in different departments, and their collation is not always put in the same form so that they do not appear to be comparable. I was endeavouring to have them put in a form that would appear to be most convenient in order to understand exactly what the situation was. As far as I was concerned, I found it would be much more helpful if they were in practically the same form in all departments.


John George Diefenbaker: They have always been in the same form.



REQUEST FOR ENGLISH &quot;HANSARD&quot; INDEX FOR FIRST SESSION OF 1950

Mr. Jean Frangois Pouliot (Temiscouala):: Mr. Speaker, as you know, we have the index of French Hansard for the first session of 1950, and we have the indexes for the French and English Hansards of the special session of 1950. We have not yet the index of the English Hansard for 1950. I have already drawn your attention to this matter.
I wonder if the present staff compiling the English index is competent. If there is not sufficient staff to do the work which was

Business of the House done by two ladies who are now superannuated, let us have another one to finish the job. If they are not competent, fire them please.



COMBINES LEGISLATION


[Stage Direction]
Mr. James Sinclair (Coasi-Capilano) presented the first report of the joint committee of the Senate and House of Commons on combines legislation, and moved that the report be concurred in.
Motion agreed to.

[Stage Direction]
Mr. L. O. Breiihaupi (Waterloo North)
presented the first report of the standing committee on railways, canals and telegraph lines, and moved that the report be concurred in.
Motion agreed to.

Louis Stephen St-Laurent: Mr. Speaker, I should like to
inform the house that at noon today there was made from my office, to coincide as to timing with a similar announcement being made in London, the following announcement:
The Prime Minister of the United Kingdom has accepted an invitation from the government of Canada to visit Canada when he is on this side of the Atlantic in January. Mr. Churchill hopes to spend two or three days in Ottawa after his visit to the United States.
[Later]:


John George Diefenbaker: One other question in connection with the announcement made by the Prime Minister this afternoon that Mr. Churchill will be visiting the dominion in January. Is the government going to give consideration to an invitation to him to speak to parliament, as he did in 1941?


Louis Stephen St-Laurent: In my communications with Mr. Churchill I was informed that it would not be possible for him to make more than one principal speech while he was in Canada. Because I expected that question might be asked, it was understood that if it was asked I would say that it was hoped he would make one principal speech in Canada but that arrangements for that would be made later. I cannot go beyond that.


John George Diefenbaker: That is fine.
fMr. Pouliot.]



DEFENCE EXPENDITURES


Louis Stephen St-Laurent: That a select committee be appointed to examine all expenditure of public moneys for national defence and all commitments for expenditure for national defence since March 31, 1950, and to report from time to time their observations and opinions thereon, and in particular, what, if any, economies consistent with the execution of the policy decided by the government may be effected therein, with power to send for persons, papers and records and to examine witnesses; and that notwithstanding standing order 65, the committee shall consist of twenty-six members to be designated by the house at a later date.


George Alexander Drew: Is the Prime Minister going to make a statement?


Louis Stephen St-Laurent: I did not intend to make a statement as I think the motion speaks for itself. It was announced in the house last June that there would be no objection to the setting up of this kind of committee to examine expenditures and commitments for expenditures made with respect to national defence. I think the motion is drawn in a way to carry out the undertaking that was given at that time.
At that time I said these departments were just being organized and getting under way and I did not think that much useful work could be done at that time as it would interfere with the organization that was going on if the principal officers had to attend for committee work. I think now this should be a continuing committee. When I gave notice the other day I said it would be unrealistic to think that the committee could get very far during this short session, but I think it would make for the expeditious prosecution of its work if it got under way now, and then it could be set up at a very early date in the ensuing sessions.


George Alexander Drew: Mr. Speaker, naturally I welcome the introduction of this motion by the Prime Minister (Mr. St. Laurent) because there has been a request for some considerable time from this side of the house for a committee of this kind. I welcome particularly the statement made by the Prime Minister that it is the intention that this shall be a continuing committee. It is the expectation that a committee with similar terms of reference will be formed early in the new session when there will be an opportunity to proceed to deal with matters in a way that will not be possible during the period remaining in this short session.
Nevertheless there will be time before this session comes to an end to deal with a number of important subjects. I trust that during

the current session there will be sufficient positive results from the meetings of this committee to convince all members on both sides of the house that this is a most desirable move. I am assuming that the wording of the motion means that all expenditures which have been actually made and all commitments undertaken up to the date on which the committee first meets from time to time will be under review by that committee.
I do not propose to discuss the terms of reference because I am satisfied that so long as the committee or the majority of the committee carry forward the intentions expressed by the Prime Minister the terms of reference will be adequate. I think it is appropriate to say that they result from discussions which took place between the Prime Minister, the leaders of other parties in the house and myself. I think it is appropriate that we consider the situation with which we are confronted at the time this motion is adopted. It is only to the extent that we recognize the importance of this committee and the importance of the information which it can obtain that the functions of the committee will be viewed in a true perspective in relation to the work it is intended to do.
We are discussing the problems of defence and a survey of the expenditures and commitments for defence in the most ominous atmosphere since the closing days of the last world war. It is only necessary to read the reports of the speeches in Paris on Monday and Tuesday to realize that the representatives of the western nations are under no illusions as to the seriousness of the situation. When the leading western powers put forward a practical and workable plan for disarmament, which in itself would give the first real hope of lasting peace, Vishinsky's response was that he could hardly sleep for laughing the night after he received that proposal. If the circumstances were not so grave one could treat a statement of that kind more lightly, because it is the conduct of a boastful child rather than the calculated representations of a powerful nation. In days like these, laughter of that kind can carry Mr. Vishinsky to the same unhappy end to which Hitler's laughter carried him if this course of conduct is followed. The very great tragedy, and the tragedy which none of us can hide from our eyes, is that if insanity of that kind should once again bring world disaster it will bring death and slaughter, not to those who have started it, but to scores of millions of innocent human beings in Russia as well as in the western world.
If Vishinsky did laugh that night, and I doubt it very much, he was laughing at the
Committee on Defence Expenditures fondest hopes of the masses of Russia, just as much as he was laughing at the earnest endeavours of the western powers to offer a workable plan which would make this the twilight before the dawn, rather than the twilight before a dark and terrible night. We know that there is only one thing which will impress the men of the Kremlin; that statement has been made over and over again. I do not think it could be made too often. It is a certainty that quick, overwhelming and crushing retribution would carry with it the same punishment that was meted out to the murderers at Nuremberg. It is the only thing which will deter those men who have seen aggression pay off on such a scale in these last six years.
There has just been made available for public reading the authoritative book on the armies of the world which ranks with "Jane's Fighting Ships," an authoritative record of the navies of the world. I am referring to Brassey's "Armed Services Year Book", which gives us the figures that have been prepared from the most reliable sources available to that extremely reliable publication. According to this book, dealing only with the members of the army as distinguished from the air force and navy, we are told that there are available for the Russian army today 14,800,000 trained men who can be put into the field within sixty days. This figure is far higher than the last estimates of an official character which were furnished to the world.
While it is dealing primarily with the army, the same authoritative book tells us that the Russian navy now has 380 submarines, with a minimum of 120 more under construction. It is necessary for us to remember that the greatest submarine plants were in eastern Germany, which is now occupied by Soviet Russia. These plants, or what remained of them, and the skilled men who were still there, are now under Russian control and supervision. We are not dealing, therefore, with the quality of work which might have been possible under Russian workmen. We are dealing with the high quality of work which we know to our sorrow is one of the great characteristics of the German people.
In that thought we might find, too, the answer to something that has caused some measure of surprise in these past few months. I have seen, as I am sure most hon. members have, comments which indicate some measure of surprise that the Russian MiG's which are operating on the Korean front have the speed and the flight characteristics which they have demonstrated. There again

Committee on Defence Expenditures we should remember that, because the Russians were not doing much bombing of Germany during the last war while the burden of the bombing was carried by the western nations, the Germans were concentrating their production of aircraft in eastern Germany. For that reason, all that remained of their great aircraft plants were also mainly in eastern Germany which is now occupied by Russia. I believe that the very high fighting standards of the MIG-15, which has caused some concern on the Korean front, can be attributed to the German workmanship which is undoubtedly going into these machines under the most severe compulsion.
This book points out one subject that has been under discussion in this house before, and I raise it again because I think we are preparing on borrowed time. I believe that this is a step which must be regarded with that measure of urgency which has not been shown in dealing with it at any time since Canada's rearmament program began. The book demonstrates the high measure of adaptability of the Red army. It points out that that army can place more fighting units in the field for the same number of men than can any of the democracies. The book contains this illuminating statement:
Whereas In a U.S. rifle company there are 37 men whose primary jobs are cooking, signalling, driving or clerking; in a Soviet rifle company all but two are there for one purpose only-to shoot the enemy.
Now, that significant quotation refers to something that we have discussed here before, and something of vital importance when we examine what it means to be told from an authoritative source that the Russian army has available 14,800,000 trained men who can be put into the field within sixty days. The book points out that, mainly because of this factor, Russia can form three times the number of divisions as can the western nations from the same number of men. It is no answer for us to say that the small number of men in a company who perform the services of the 37 men in a U.S. rifle company simply indicates the different living standards between the two nations. That is true. But that is not any answer to this problem. We are dealing with the cold arithmetic of military strength. The number of units which may confront us from the number of men they have is the arithmetic with which we are concerned. It is against such dreadful realities as these that we Canadians must measure the adequacy of our own preparations at this time. We must neither exaggerate nor minimize our place in the great partnership of freedom.
The first thing that must strike us is that our whole population in Canada, although we are a nation with the third largest land
IMr. Drew.]

area in the world, is substantially less than the number of trained men available to the Russian army alone today. On the other hand), however, when we recognize the relative importance of Canada's position within the North Atlantic community, it should make us realize the urgent necessity for so planning our defence organization that we will attain the maximum possible strength by the most effective employment of our human and material resources. We are confronted today with the inescapable fact that the one and only hope for the preservation of western civilization is to make every man and woman in uniform so much more effective that every man and woman that Russia and her satellites can put into uniform, that our strength will be measured not in numbers of men and women in uniform but rather will be measured in terms of the immense hitting power that we are able to place in the hands of those men and women because of our vastly superior industrial skill.
Have we in Canada taken advantage of that skill? Have we in Canada adapted our organization and the arming of our units to take full advantage of our technical and productive capacity? The answer is-and it is an answer which cannot be challenged-that except for our participation in the development of the atom bomb, we have done practically nothing to meet that test. Our contribution to the actual fighting in Korea has been one infantry brigade. Our contribution to the land forces in Europe is another infantry brigade. Although those brigades are well trained by every standard and have had ample opportunity to learn to use the weapons in their possession, and although they have in their ranks the highest standard of young men who wear the Canadian uniform, there can be no doubt that there is not that vast difference between the high hitting power of those units and that of the units of Russia and her satellite countries which is possible when we examine the over-all difference in our technical and industrial skill.
Those young men have given and will give a splendid account of themselves in Korea or anywhere else. They will give a splendid account of themselves in Europe under General Eisenhower. But do those units meet the standards which must be applied if we are to be able to meet the immense manpower resources of Russia and her satellites? Have those men a substantially higher hitting power per man than that which could be placed in the hands of the 14,800,000 Russians who, we are told, are now available to be put into the field as trained men within sixty days? Have our young men greater hitting power than the young men of the

satellite nations which are under Russian direction today? Unless and until we can answer that question in the affirmative, our plan for defence is being carried forward in an atmosphere of complete and hopeless unreality.
It is obvious that the places where the ultimate issues as to world peace or world war are going to be decided are in Europe and the Middle East rather than in Korea, unless some wholly unexpected development :here should precipitate something which cannot now be foreseen. It is perfectly clear that, with the strength which has been built up in Korea, the line now held by the forces of the United Nations can be held indefinitely. It would seem that at any time the commanding officers of the United Nations forces in Korea found any reason to advance those lines, they could do so. There are other places in the world where, in recent years, static positions have been held for long periods, creating a situation that somewhat resembled a fortress. There is, in fact, just such a situation on the Suez canal today where the British, without open warfare, are occupying an area in order to protect the life lines to the east. This is an old and historic situation and one which might continue for a long time. But outside of something wholly unexpected happening in Korea, the place where the danger lies is in Europe and the Middle East. That being so, we see quite clearly that the place where the strength must be accumulated to prevent war-and that is the purpose of all that we are doing-is bound to be many thousands of miles away from Canada. That being so, the first and patently obvious step would seem to be to organize our defence forces with that reality primarily in our minds, and to organize our forces in such a way that the forces we are called upon to move by sea or air at any time will have the highest possible hitting power for the least number of men. No other plan answers the most elementary logistics of military preparation.
It is considerably more than a year ago since I urged in this house, as others have done, that the North Atlantic Treaty Organization should rationalize the organization, training and equipment of the units supplied from the various member countries of that organization, in a way that would produce the greatest possible military force in the critical areas, with full recognition of the problems of transportation and supply. Surely if logistics-to use the extremely expressive term that was so frequently employed during the last war-are to be applied at all in this case, it would seem that economy of effort would suggest that those forces which have the lowest hitting power per man and can
Committee on Defence Expenditures be raised near the danger spot should be raised there, whereas the forces which must be moved a long distance should be forces with the highest possible measure of hitting power. Every single man that is moved thousands of miles away from Canada involves not only the movement of that man and his equipment, but also a commitment to move food, supplies, ammunition and all the other requirements of the men in the field over thousands of miles, which, in the event of war itself, would be threatened by the most modern aircraft and the most modern submarines. A simple rational approach to this problem suggests that here in Canada we should not be training the mass formations with low individual hitting power; we should be training fast hard-hitting armoured units, with the highest possible hitting power per man. We should also be concentrating, as we have been told we would concentrate, on the air power which can be moved with the utmost safety to any danger point, or for that matter to any part of the world.
With this situation in front of us, it seems clear that the United States and; Canada, each in proportion to its own producing capacity, must, to a very considerable extent, be the arsenals of Europe, and to a substantial degree the rest of the world as well. That being so, it would seem that our effort should be directed to supplying the weapons and equipment of all types needed for the land forces in these critical areas where the men can be raised, armed, equipped and trained, while we concentrate on compact, hard-hitting and extremely mobile forces which can make the most effective use of the transportation supplies available, whether by air or by sea.
Let me illustrate what I mean. Our present contribution to the combined forces under General Eisenhower is at this time the 27th infantry brigade, which is now in the process of being moved to Europe, and one fighter squadron of the Royal Canadian Air Force, now in training in the United Kingdom. In so far as the forces under General Eisenhower are concerned, I understand it is the intention that the bomber and fighter squadrons are to be sent to Europe. That is not possible, however, at this time because adequate airfields are not available. One of the reasons that airfields have not been available is first of all the difficulty of acquiring land in areas of such concentrated population; but second, and more decisive, is the fact that they have not been able to divert men with technical experience to carry out the construction of these great enterprises as they would wish to do. Under these circumstances, is it not possible that we can do much

Committee on Defence Expenditures more for the common cause if we can provide technical units which can be raised in this country very quickly and trained for their special tasks because of our special skill in the construction of airfields, roads and construction of that type? When there are so many men in Europe available for the .and forces which are required right there, needing the arms and equipment which could be sent from the United States and Canada, I suggest that it may hardly be rational for us to be sending to Europe men with the lowest average hitting power of any combat forces, when the thing that they need over there is the technical service to do these jobs which I have mentioned.
When I say that, I wish it clearly understood that I am only repeating what I have often said before. When I say that, in the end it is the infantry which decides the ultimate result of any war. They are the men who in the final stages must always ;arry out the occupation and hold the positions which are to be held. What I have been pointing out is that these forces are available near the places where men, equipped and trained for that work, are required at this time. They are also nearer their own supplies of food and of other requirements. They do not impose the same demands on the shipping routes of the world as are imposed by every man who is moved from Canada or the United States over there. In combat forces, for the reasons I have mentioned, it would seem that we should concentrate on fighter and bomber squadrons as well as on squadrons specially trained as they were trained and equipped in the last war to guard the sea routes of the North Atlantic as well as of the Pacific.
Economy of transportation, to say nothing of the problem of supply, suggests that in land forces here in Canada we should be concentrating on these fast, compact, hardhitting mechanized units which not only are best suited to the task, but which can be trained here as they cam be trained nowhere in Europe. It is not enough to put tanks, armoured cars, reconnaissance vehicles and other equipment of that kind in the hands of men in uniform. These men must be trained to handle these complex vehicles and weapons. Training is what counts. The simple inescapable fact is that there is not enough room anywhere in Europe today to provide the training areas for units of that kind. In the unhappy event of war, property rights, unfortunately, soon go by the board, and under circumstances such as that units can take the shortest possible route to any given point. In peacetime, however-and we are


talking of peace and the hope of continued peace-relatively small training areas and narrow roads make the effective training of tanks, armoured vehicles, reconnaissance and other units of that kind practically impossible.
Many hon. members in this house recall the largest training area im Britain, the Salisbury plains. Modern fighting vehicles can cross the Salisbury plains in a matter of a couple of minutes. That area is not adequate to give effective training to men handling these modern and extremely fast machines. Russia, unfortunately, has plenty of space. Before the last war Germany had just enough, but barely enough, in some of those sandy areas to the east of Berlin. Nowhere else in Europe, and most certainly not in the British isles, is adequate training space available today for fast armoured or other mechanized units. For that very reason units of that kind should be trained as much as possible here in Canada or on the North American continent where we can simulate every kind of military situation from arctic to tropical.
Moreover, we can carry out training inland as well as on the seacoasts, because with our lakes and great rivers we can carry out amphibious landings, and all the other activities of that kind, which are essential parts of modern military training for land forces. There is, in fact, every reason why training should be carried out here, and why we should be concentrating on that type of unit, so far as land forces are concerned.
May I point out another reason why that training should be carried out here, and a good deal of it carried out in the prairie provinces. Training of that kind, whether on land or in the air, consumes enormous quantities of gasoline and fuel oil. All the gasoline and fuel oil used in Great Britain or in Europe must be carried there by tankers, and that imposes an uneconomic and very heavy burden on the shipping routes and upon the tankers, which should be available for other purposes. In times of peace there are obvious reasons why tanker space should not be devoted to that purpose, except where absolutely necessary; and in time of war we all know that tankers are peculiarly vulnerable to submarine attack.
Here in Canada, with our enormous oil resources, which are increasing every day, we are in a position to supply the units direct from the fields, with very short transportation to the units themselves.


Mr. Cruickshank:: By pipe line?


George Alexander Drew: No; this is a case where a great part of the training can be carried out satisfactorily in areas adjacent to the wells themselves. And perhaps I might point out that there are practical reasons why it would not be a bad thing to have a number of fighter squadrons training near those oil fields.


George Alexander Cruickshank: Hear, hear.


George Alexander Drew: So far as the navy is concerned, it has obviously as its major role its antisubmarine activities, and other activities related to the protection of the Atlantic and Pacific sea routes.
While we have been told that emphasis is being placed upon the development of air forces in the allocation of funds made available for that purpose, we have not yet seen any evidence that our organization has been rationalized to the point where there is a clear concentration on this type of training.
The Secretary of State for External Affairs (Mr. Pearson) said in Paris yesterday that conditions are daily becoming more serious. Referring to the hope that the United Nations Organization might be the best organization for preserving peace he said, "The emphasis is shifting from best to last." In those words he made it clear that in his mind hope is diminishing-although it has not disappeared -that the United Nations can be an effective instrument for preserving peace, with Russia remaining as a member of the United Nations. These were his further words:
I for one am not prepared to abandon all hope of negotiations within the U.N. We know, however, that a determining factor must be the attitude of the Soviet union.
Those words are open to no other interpretation than that in the opinion of the Secretary of State for External Affairs, and also of course that of the government of Canada, the United Nations can be regarded as an effective place for the preservation of peace, only if Russia changes her course in the meetings there.
It is with that grim and ominous warning before us that we must measure the effectiveness of all that we are doing. Peace is not going to be preserved by statements that we are up to schedule. Schedules may be very loose and uncertain things, as all too often we have discovered in the past. Schedules can be revised from time to time, downward as well as upward, particularly when those schedules are not known to the people of Canada. Neither is peace going to be preserved by telling the people of Canada that we have the best aircraft, the best engines, the best guns and the best bazookas, and so on, until those aircraft, engines, guns, bazookas and other weapons and machines are actually in production.
Committee on Defence Expenditures
Most of the things about which we have been given such glowing descriptions are not yet in production in Canada. In the active and reserve forces of this country, in all branches of military service, we have young men and women second to none anywhere in the world. Their effectiveness, however, in this great effort being made to preserve peace will be measured in terms of the quantity and quality of their weapons and equipment, and the training under service conditions to use those weapons. By that test Canada today, after three years of greatly publicized rearmament, is in a position of tragic weakness.
A good starting point in meeting this problem, and meeting this problem with full knowledge of the facts, would be to fire every one of those propagandists who have been issuing these glowing stories from the Department of National Defence. Remember, we have an effective procedure by which the people of Canada can be told what is being done. When our units have the kind of equipment they should have, when they are doing the kind of training they should be doing under conditions of this kind, when their numbers are adequate for the task with which we are confronted, then let the trained representatives of the press of Canada see those units, see their training and see their equipment, and they will tell the people of Canada the accurate facts, as they have been doing for years when they were given that opportunity. All the action and all the work of that group of men who have been employed strictly for propaganda purposes has been to mislead the people of Canada as to what the facts actually are. What we want to know, what the people of Canada want to know, is this: What is the situation in this grave period, the gravest period Canada has known outside of periods of general war?
A good point also would be to make sure that when the units are equipped, when they are put through their training, and when they are carrying out their demonstrations, no part of that training and no part of their equipment shall be withheld from normal inspection by members of the press of this country -unless it is something obviously of a very secret nature.
Please let no one suggest that the Russians do not know about it. We have made sure that they have every possible facility to know. We not only make the facts generally available to them by means open to the Russian and other embassies associated with them here, but we also make sure that there shall be no limitation, in the ordinary course, to the activities of those spies which are available to them within the communist party of
960	HOUSE OF
Committee on Defence Expenditures Canada, throughout this country. In the committee to be set up under the motion now before the house there will be an opportunity to obtain these facts. The adequacy, however, of the inquiry will be determined by the procedure before the committee when it meets. I welcome the assurances the Prime Minister has given as to the scope of the activities of the committee. I wish to say that the Prime Minister has given every evidence of a wholehearted desire to make the committee effective in examining expenditures and commitments on defence right up to date, and I trust that when the committee meets it will carry forward the intention that he has expressed.
I mention this point for a particular reason. On October 19 the parliamentary assistant to the Minister of National Defence made a speech in the house which left the impression that the government was not prepared to disclose the essential facts in regard to the equipment and organization of our forces. In that speech he raised the old and mythical bogey that information with respect to the organization and equipment of our forces would be of help to the enemy. Some of the statements in that speech sounded strangely like statements made in the house in the tragic spring of 1939 when the same reasons were being given for not disclosing to the people of Canada that units which proved their valour to the hilt in the war that followed were at that time without the weapons, equipment and other requirements of modern war.
We have been told earlier this afternoon by the Prime Minister that the greatest fighter for freedom in the world today, Winston Churchill, is to visit Ottawa in January. Members of this house on both sides have indicated their pleasure that we shall have the opportunity to see in the capital of Canada a man who has done more than any other single human being for the preservation of that freedom which we are seeking to preserve by the efforts we are making today. When the Prime Minister tells us that he will be here in January, may I remind the parliamentary assistant that if he is in doubt about the advantages of discussion of subjects of this kind it would be well if he read the speeches of Mr. Churchill before the last war. If Mr. Churchill had been able to force disclosure to the people of Great Britain of the real weakness of Britain, which was not relatively so great as the weakness of Canada at that time, there would not have been the same measure of uncertainty for a considerable time that there was during the first years of the war as to whether freedom and civilization, as we know them, were going to survive.


No, the only people who are deceived by withholding facts are the people who have the greatest right to know. We can all be perfectly certain that the potential enemies, whose identity we know, are fully informed. We are not telling them anything, but the people of Canada should know so that the only real driving power of a democracy, a strong public opinion, may be behind the most vigorous and effective preparation for defence that this country can possibly carry out. I would point out that the speech of the parliamentary assistant to the Minister of National Defence was made before the Prime Minister had announced that he was prepared to introduce a motion for the purpose of setting up a committee with the terms of reference which are now before us. When the parliamentary assistant made that speech I did not comment on it at the time, although I spoke later the same day, because I had met the Prime Minister a few days before and had reason to believe that a motion similar to that now before us would be presented to the house.
I have raised this matter today only because I hope that our expectations for a committee with full and sweeping powers will not be disappointed by anything that may be done when the committee meets. I do not raise this matter for the purpose of causing unnecessary controversy in this chamber on a matter of such tremendous importance, but we know that on other occasions terms of reference have been defined on a very restrictive basis by chairmen of committees and the majority who supported them. I hope that the chairman of the proposed committee, whoever he may be, and the majority associated with him in the same party, will on this occasion carry into that committee the spirit of the statement made in the house this afternoon by the Prime Minister of Canada.
If this committee is given full power to carry out its tasks in the open and without any restrictions, then this may well be a new day in the preparation of the strength of the defence forces of Canada. I believe every member will welcome this resolution. I believe every member will welcome the inquiries which will take place, and if they are open, complete and give the information which the people of Canada want, I am sure that the people of Canada will wholeheartedly approve of the resolution now before us.


Mr. M. J. Coldwell (Roselown-Biggar):: Mr. Speaker, I think I should read the resolution now before us because I want to make my remarks relevant to it. I know that the courtesies of the house are extended to hon.

members, and particularly to the leader of the opposition (Mr. Drew), but I was not prepared this afternoon to discuss the whole problem of the defence of Canada under a resolution to set up a defence expenditures committee, and I shall not do so because I think that one should endeavour to be relevant to a resolution moved before the house.


George Alexander Drew: Mr. Speaker, I do not want to interrupt the hon. member but I do not wish to let go unchallenged any suggestion that I was speaking beyond the strict confines of proper debate on this motion. I made it clear that the reason I was discussing the defence situation and the threat abroad was that we might know how important it is that when this committee meets it be given the widest powers, such powers as have been defined by the Prime Minister (Mr. St. Laurent).


Major James William Coldwell: I did not rise during the speech of the leader of the opposition because we extend to him courtesies that are not extended to other members of the house. However, I was rather surprised to find the moving of this resolution used as an occasion for a debate on external affairs and on other matters dealing with defence policies that clearly do not come within the confines of the resolution. I want to say that, because I feel it should be said.
The resolution reads:
That a select committee be appointed to examine all expenditure of public moneys for national defence and all commitments for expenditure for national defence since March 31, 1950, and to report from time to time their observations and opinions thereon, and in particular, what, if any, economies consistent with the execution of the policy needed by the government may be effected therein, with power to send for persons, papers and records and to examine witnesses; and that notwithstanding standing order 65, the committee shall consist of twenty-six members to be designated by the house at a later date.
The resolution is to set up a committee to examine expenditures that have been made from time to time and commitments involving expenditures from March 31, 1950, to date. Like the leader of the opposition, I welcome this resolution. I welcome it because I think that a committee of this sort which was established during the war years performed a useful function for Canada in safeguarding some of the expenditures and commitments made in connection with our war effort. It is in the light of my experience as a member of that committee that I wish to discuss this resolution.
I think the people of Canada expect this parliament and this government to get the best possible value for the expenditures being made. The purpose of this committee should be to see that we get the best value possible.
Committee on Defence Expenditures It is regrettable that we are not getting the best value for the expenditures we are making because of the inflation that has occurred, which means that our expenditures must be vastly greater than they otherwise would be because of the high prices that have developed in our economy.
I think the people of Canada expect that no undue profits shall be made by corporations and organizations providing equipment for our armed forces. As the house well knows, from time to time during the past number of years, particularly last year, we have moved motions suggesting that a limitation should be placed on the profits made by corporations and companies engaged in the production of war supplies. We suggested that no more than-I think this is a generous profit at this time-5 per cent should be made on the capital employed in the production of war materials and supplies.
During the last war, because of necessity perhaps or because of the shortage of factory space, machines and so on, the government gave great concessions to some of the greatest and most powerful corporations in this country, concessions which enabled them to exercise great power in our economy and to gather to themselves returns which were out of all proportion. I am not going into the great financial returns that were made possible to corporations like the Aluminum Company of Canada. A total of $164 million was provided to that company in the way of accelerated and special depreciation and an increase of 5J cents per pound on aluminum over and above normal profits and depreciation in order to pay for the great expansion they undertook at that time.
When that matter was under discussion we were told that this was being done because these great facilities then being provided would not be required after the war. At noon today I was reading the report of the subcommittee on war expenditures which dealt with that great project and I noticed that the statement was made that after the war these facilities would no longer be required, that the great power plant would be idle in part and that many of the facilities that were made available at that time would be destroyed or dismantled. Yet ever since, upon the basis of what I call a great gift which was made to the Aluminum Company, that company had been expanding all the time.
The same applies to some recommendations made by the committee. I have in mind the manner in which we went into the safeguarding of Canadian interests in connection with the great chemical industry of this country.
9B2	HOUSE OF
Committee on Defence Expenditures The chairman of the subcommittee dealing with that matter was Mr. Tripp, who at that time represented the old constituency of Assiniboia. Two plants had been erected at great public expense, one in the Niagara district and one at Calgary, and it was recommended that one should be retained so that the farmers of Canada might be able to obtain fertilizer at a reasonable price in the post-war years. Ammonium nitrate was the fertilizer that we then had in mind. That recommendation was neglected, the plants were sold but I do hope that recommendations made by this committee will be carried out as far as possible by the government of the day.
I remember also how members from British Columbia pointed out that, after the war, industries which had been established on the Pacific coast would require basic supplies which they then had to ship in from great distances. I remember the late Mr. McGeer, the Minister of Fisheries (Mr. Mayhew) and Senator Reid bringing up this matter. Two of them were members of the subcommittee along with myself. Mr. McGeer appeared before that committee and urged that the iron ore and coal resources to be found in great abundance on Vancouver island should be utilized for the establishment of an industry there to provide steel plate for the shipbuilding industry and so on.
We were told at that time that no such industry would be permitted on Vancouver island, that any expansion that would be made would be in connection with mills already established such as those owned by Algoma Steel Company and the Steel Company of Canada. Look up the record and you will see that what I say in that respect is absolutely correct. What do we see today? We see British Columbia ore going to Japan, being fabricated and then sent back to Vancouver in many forms. All these might have been produced on Vancouver island if the same consideration had been given to establishing an industry there as was given to the established mills at Algoma and Hamilton.
These are the kind of matters that should receive consideration by members of parliament and by this parliamentary committee in connection with our defence preparations. The leader of the opposition spoke about the principal job of Canada being production of certain types of equipment and perhaps the training of men for service in the air. Well, they need aeroplanes. We established a great industry in Canada and made some of the outstanding aeroplanes now flying across this country and across the ocean. We established Canadair, and then we parted with it. Today


we have to buy the product of an industry which the people of Canada established here.
Then, of course, there are the contracts that are made for the provision of equipment. Are they being properly fulfilled? During the sittings of the war expenditures committee during the last war, hon. members at times not only had the opportunity of visiting some of the plants that were providing the equipment for these large expenditures, but on occasion we had the privilege of seeing some of the great projects that this country undertook. They were great projects which reflect a great deal of credit upon Canada. For example, when we saw millions of dollars being expended at Gander in Newfoundland, we wanted to know what it was all about. A small subcommittee of the war expenditures committee went to Gander. There we satisfied ourselves that the millions of dollars that we saw on the accounts of the government of Canada were no doubt fully justified. An excellent job was being done in completing a great field from which planes could be shuttled across the Atlantic to assist those who were defending freedom in Europe.
Then, we built the great Polymer plant at Sarnia, one of the most successful projects that this country has ever undertaken, and one of which we can be justly proud. This plant has not only performed a useful function, but has brought a considerable return to Canada. It is a clear indication that projects of that description can be undertaken by crown corporations and brought to a successful conclusion. My regret is that when we had the opportunity of doing more of this kind of thing during the war, we did not do it. I am not pretending that the $164 million to which I referred as being paid to the Aluminum Company came out of Canada. It came out of our allies principally, but some of it came from Canada. I believe it is to be regretted that some of these great industries could not have been retained under the ownership and control of the people of Canada after we had, with our allies, so largely paid for them. Such matters should concern this committee.
I believe it is the duty of the committee to see to it that we get the very best value for the moneys we expend in providing the equipment which our men need. I believe everyone in this house is anxious that in the defence preparations as well as if, God forbid, war should come upon us, the young men who carry the badge of Canada shall be equipped with the best and most complete equipment it is possible for this country to provide. I think we all have that desire. We stand behind these young men who are called upon

at this hour to take their part in building the defence of the western world, in order that we may prevent the onset of another world war. It is regrettable, but I think it is true, that we have had to build up this strength.
I am not going to go outside of this resolution, as I said at the outset of my remarks.


Mr. Fulion:: You have been fairly far afield already.


Major James William Coldwell: The hon. gentleman says I have been far afield already. I am not aware of it.


Mr. Macdonnell (Greenwood):: The leader of the opposition (Mr. Drew) was only an also ran compared to you.


Major James William Coldwell: As a matter of fact, I believe that if any intelligent person reads the resolution, and then reads the remarks I have addressed to that resolution, he will find that I have remained within the four corners of it. I have been discussing expenditures in connection with our defence preparedness. I have not been discussing the whole of the military, naval, air and army policy of the government.


Mr. Maclnnis:: Or of the governments of the world.


Major James William Coldwell: Or the governments of the world, as my hon. friend suggests. I did not interrupt the leader of the opposition, though I felt he was outside the resolution. I think, as a matter of courtesy, the house having extended this courtesy as far as it did, 1 should not be interrupted either.


Mr. F. D. Shaw (Red Deer):: Although in substantial agreement with much that was said by the leader of the opposition (Mr. Drew), Mr. Speaker, we too were somewhat surprised to find that he precipitated a debate on the defence policy under this resolution. In our humble judgment this resolution has nothing to do with the determination of whether the government defence policy is good or bad. The resolution before us states specifically that the membership shall examine into public expenditures. In fact, it says:
-examine all expenditure of public moneys for national defence and all commitments for expenditure for national defence since March 31, 1950, and to report from time to time their observations and opinions thereon, and in particular, what, if any, economies-
Then there is this phrase:
-consistent with the execution of the policy decided by the government . . .
I well recall that when a motion was moved in March, 1941, which was intended to establish the war expenditures committee, this same matter came in for extensive debate. In fact, the debate lasted for hours and hours.
94699-61J
Committee on Defence Expenditures I believe it was eventually agreed that the committee would not deal with government defence policy. This is a matter for the government to determine, and for which the government will be held accountable. There are occasions which afford an opportunity for debating defence policy in the house, but this is not one of them.
During the first years of world war II our early preparations for war had to move with great speed. Prior to the outbreak of the war in 1939 we were either such lovers of peace, or so blinded to what was going on in Europe, that we found ourselves most inadequately prepared. Then, everything had to be done in a hurry. Under those circumstances it was understandable that certain concessions had to be made; that excessively high prices had to be paid for certain things, and therefore it did become imperative that a committee on war expenditures be set up. It was set up in 1941. We are faced with a slightly different situation now. While there is great danger and while, as to our defence effort, there is need for haste, there are not the same circumstances which might be taken by some to justify, let us say, extravagance should there be extravagance, excessive payment should there be excessive payment, and so on.
In moving for the establishment of this committee today, the government is not establishing a precedent.
It was my privilege, Mr. Speaker, to serve for some time on the war expenditures committee. I also served, after the war, on the same committee which became known as the war expenditures and economies committee. I am quite convinced that that committee did a valuable work. I am convinced in my own mind that constructive and helpful suggestions were made to the house. Certain of those suggestions-possibly most of them-were accepted by the government. Action was taken and money was saved as a consequence of following out the recommendations of that committee.
I well recall that in 1941, and in subsequent years when the committee was reconstituted, the government laid particular emphasis upon certain things. We of the opposition were told that it was not our responsibility merely to seek grounds for criticism of or attack upon the government. We were told that it was not our duty or responsibility to adopt an attitude which would result merely in our embarrassing the Department of National Defence. We were warned at that time that the committee could not succeed if we approached our work in
964	HOUSE OF
Committee on Defence Expenditures any spirit of hostility, and that sheer faultfinding should not be characteristic of that committee.
While certain rather unpleasant experiences were encountered by those of us who served upon those committees, I am quite convinced that their members did not undertake their deliberations in any spirit of hostility or in any attitude of fault-finding and so on. I feel that the same attitude should be taken by the committee at this time. I feel that the members of the committee, whether they be opposition members-and after all, I assume that probably it would be the opposition members who would do it-or others, should not go into their deliberations with the idea merely of seeking out grounds to criticize, to attack or to make it more difficult for the Department of National Defence to carry on its work.
But having said that, I would suggest that it is also the duty of the majority of the committee, who are government members, not to commission themselves as counsel to go in and block the freest and most open type of investigation or to cover up and defend where it is obvious to committee members that there is room for improvement and where it might be possible to save money for the taxpayers of this country. Let me emphasize the fact that if there is a duty resting upon opposition members, there is also an important duty resting upon the shoulders of government members of that committee.
I feel that a committee of this kind should give careful consideration to an examination of the methods of expenditure. I also feel that the committee should undertake to determine whether there can be additional controls over expenditures. After all, we must not forget that we, as a parliament, have already come to the conclusion that over a period of three years we shall spend approximately $5 billion for defence, and that during the current year we shall spend $1,800,000,000 on defence, or practically 50 per cent of our budget. All of us are certainly mindful of the fact that that is a terribly heavy burden to be borne by the Canadian taxpayers, but the Canadian taxpayers have approved. They realize the dangers which confront us. They appreciate the urgent necessity for taking every possible action to defend our country against aggression. At the same time they expect that the Canadian government shall exercise every precaution in order to be certain that we are getting full value for the money that is being spent.
We realize fully that government officials are not infallible. They are bound to err. Hence I do not believe it should be the duty


of that committee merely to seek out mistakes for the purpose of criticism. By all means, let the committee seek out mistakes, and evaluate them in the light of the effect that they may have on the future. In my estimation it is exceedingly important that that be the attitude of the members of this committee.
I am going to emphasize again what I consider to be the position of a member of that committee in relation to the taxpayers of the country. This committee should enable those who represent the taxpayers of the country to procure all possible information. It should enable them to procure information which many of us cannot possibly procure as ordinary members of this house and which the taxpayer cannot have unless it is procured through such a committee as this. The government must be fully prepared to provide every opportunity to enable those members to procure all of the information required. After all, the taxpayers will believe that the members of the committee are actually their watch dogs, as it were; and it will certainly make the taxpayers of this country feel much better about everything if they know that the members of that committee are right there, can get information and know what their money is being spent for.
The committee must have ample power to examine all defence expenditures; I would even go a bit further and say defence expenditures for those services directly connected with national defence; and they may have to go beyond the actual activities of the Department of National Defence in order to procure that information.
I have already indicated, Mr. Speaker- and even though it may be repetition I am going to re-emphasize it-that the majority of the committee will be government members. I assume that there will probably be an 18-5-2-1 break-down, giving the government eighteen members out of twenty-six. Such a great responsibility rests upon those eighteen that I declare that the success or failure of that committee is going to depend on those eighteen.
I am going to give you, Mr. Speaker, an indication of what I have in mind when I emphasize this matter. I well recall that, immediately after the cessation of hostilities, I had occasion to complain that, in the disposal of crown assets within this country, there was terrific waste and destruction. I also recall that it took days and days to get the matter dealt with, and I must say that there was a good deal of blocking. There were denials and, upon one occasion, a certain member of that committee-he was a government member-came to me on the side

and warned me that I had better keep my mouth shut. Then finally, Mr. Speaker, the deputy minister of national defence, air service, appeared before the committee and said: Yes, you are right. In effect that is what he said. He said: That is what is being done. Unfortunately there has been a misunderstanding of a certain directive. But this was carried on but later steps were taken to correct it. That action should have been taken days and weeks before, because the situation led to a great deal of unhappy publicity. Every time something of that kind occurs, it just causes these heavily burdened taxpayers to lose a good deal of confidence in our ability to carry on the matter of defence.
It just so happens, Mr. Speaker, that I am not to be a member of this committee, having previously assumed the responsibility of becoming a member of another committee. There is one matter to which I think the committee should give its attention. I am going to make reference to it at the present time. Over the past months and years I have been greatly troubled about the cost of publicity. I would suggest to the committee that they give their particular attention to the public relations of the three branches of the armed services. In my opinion too much money is being spent. We are not getting value for the money spent. There is a great deal of duplication, and there is a great deal of material going out to newspaper publishers that often is not published because of the fact that it serves no useful purpose in that particular community. I have had newspaper publishers mention this to me on a number of occasions. I happen to hold in my hand an editorial which refers to the three branches of the armed services; that is the public relations branches. This editorial was taken from the Saskatoon Star-Phoenix of October 17. It says:
If the federal government Is looking for spots to save money, we suggest it peer into the public relations of the three services. Day after day, newspapers and radio stations are bombarded with news releases, so-called, most of which have little application to the districts to which they are sent. All of this costs money, irritates editors who have to waste time looking at the stuff and inevitably produces a bad reaction among editors of the better type of copy. Surely those in charge of the pubilc relations set-up should have enough acumen to "target" their releases-that is forward to areas concerned only items of real interest to that area.
But worse than the news releases are the pictures which are sent out all over the country. These pictures cost a lot of money and as often as not haven't the slightest value to the majority of the papers to which they are mailed.
This foolishness, it seems to us, can be easily avoided if the public relations staff were competent newsmen. It should take little news sense to realize that, with the newspaper offices flooded with pictures of the royal visitors, there is little value in sending
Committee on Defence Expenditures
to Saskatoon a picture of the bearer of the King's colour at the forthcoming welcome to Princess Elizabeth and Prince Philip. Especially when the person in question hails from Duncan, British Columbia.
A lot of money goes down the drainpipe in these pictures. It could just as easily be saved.
Were this the only editorial that I have seen relating to this matter, probably I would have hesitated before reading it. I would say that it is typical of a great many editorials that have been printed from time to time. I repeat: a number of newspaper publishers have conveyed the same sentiment to me personally. Then, on top of that I have often wondered to myself, as one who reads seven or eight newspapers in one day, why a lot of that material was ever sent to the newspapers in the first place. I suggest, Mr. Speaker, that in the course of its work the committee give some thought to this question of publicity. I presume they would have to hold to the defence services because after all it is in effect a defence expenditures committee.
We welcome the setting up of this committee. We feel that the leader of the C.C.F. party (Mr. Coldwell) indicated a number of fields in which the committee might work. We trust that all members of the committee will enter upon their duties with the realization that they have one specific function to perform, namely, to examine expenditures and to determine wherein economies can be effected.


Mr. Clarence Gillis (Cape Breton South):: Mr. Speaker, I should like to say a few words on this resolution. If it is designed to serve the purpose for which I think it is intended then I think it is too restricted. On several occasions in this house many hon. members, including myself, have urged upon the government the necessity of setting up a defence committee. My conception of a defence committee certainly is not along the lines of the present resolution. We have to ask ourselves this question first: Why have we a defence program at this time? What makes it necessary? If it is necessary, then we have to ask ourselves: What have we to do about it? What is the most adequate way of handling the situation?
If one looks at the press from day to day he finds it clearly set out why we need a defence program at this time. I hold in my hand a recent press clipping, the caption of which is "Ike sums up armed might of Russia". I am not going to read it, because it is likely that every hon. member of the house has seen it.
The Russians have 4 million men available immediately. It is a hard-striking force, very modern and can move fast. That is the reason
S66	HOUSE OF
Committee on Defence Expenditures why we on this continent are obliged to have a defence program at this time. Our defence program is designed, or should be, to meet the possibility of that very formidable force striking fast anywhere at any time. When we read this resolution in the light of those facts we find that it merely asks that a committee be set up to study defence expenditures within the confines of government policy. It has never been clearly defined to me what government policy is.


John George Diefenbaker: Government policy of
the past.


Clarence Gillis: A matter that is within the confines of government policy is all-inclusive because the defence program is all-inclusive. It runs into industry; it runs into practically everything. Quite different sections of government have to do with defence production and so forth which are not exactly national defence. If the terms of this resolution are adhered to strictly by the chairman of the committee I am afraid that the committee will not find out very much about what is going on in the realms of defence.
Another thing I am concerned about is this. The members of this committee who work under the terms of this resolution do not want to work with the idea in mind that their job is to cut expenditures. In my opinion their job is to determine whether our defence program is adequate or not. That does not mean just manpower in the navy, army or air force where our defence program is adequate or otherwise. You may have to step up expenditures. We may not be spending enough money. We may be spending money on non-essential things that should be transferred to other matters that are more essential. What I have in mind is this. Since nobody knows who the members of the committee will be, I should like to put my ideas on record with respect to certain things that I think the committee should look into. My first point is this. If we are to have a defence set-up that is going to meet this very efficient threat with which we are faced, one of the first things we have to do is to recognize the fact that the man who goes into the navy, army or air force must go in with a contented mind. That man is giving up his home and his job, as well as the comforts and security of civilian life. He is placing himself in the hands of army, navy or air force personnel who will have power over his life, who can tell him when to get up in the morning, when to go to bed at night, what he must do at a given time-and without arguing or answering back. That man must be assured that his family requirements at home are cared for.

I would draw the committee's attention to the fact that, in my opinion, the allowances for families of service personnel are inadequate. I have had many complaints from women left at home, to the effect that they are unable to maintain their homes and meet their monthly commitments with the incomes provided by way of allowances to soldiers in the ranks. Many women have written to me.
I have got in touch with the Department of National Defence on many occasions, forwarding requests that men be permitted to leave the service on compassionate grounds because their families were in need.
Those men cannot go to Europe, when they are receiving letters from their wives and children stating that there is insufficient shelter and clothing, and not enough to eat at home. The minds of those men are disturbed, and they are not going to do the kind of job in the services that they can do. In my view the allowances must be stepped up. The committee must ascertain whether, on the basis of present allowances, we can have an efficient army, navy and air force. I think again of the dependent mother for whom provision was made in the last war. I think of the dependent and incapacitated father in the home where the young man was the breadwinner, and where allowances were given. But today there are no such allowances. I have received many letters of that kind, and brought them to the attention of the Department of National Defence.
Those boys want to leave the services, because they see that their fathers and mothers have not enough income to sustain life. The minds of such men are disturbed, and they cannot do the job they should be doing. To remedy this, of course, would mean an addition to defence expenditures.
At this time, in connection with our present armed forces, we have made applicable certain legislation that was effective after the last war. We have granted them educational rights, and the like. There is however one gap, and that is that the young man leaving the services at this time is not entitled to thirty days' leave, and to the thirty days' pay he received after the last war. At that time he was given a chance to leave the service, to look around, so that he might rehabilitate himself properly. Today when he goes to a depot for discharge he receives no clothing allowance. He is sent out wearing a uniform; and, in most of the cases which have been specially brought to my attention, they have had hardly enough money to pay transportation expenses home. They are out, they are unemployed, and have no chance to look around. The man coming out under those circumstances, without thirty days' pay, is in difficulties.

We are forming a brigade in Europe, and we are going to have to supply replacements for that brigade. From time to time we need replacements in Korea. If we are going to have an adequate defence program, then one of the first things we must do is to recognize these small difficulties and they are only small when compared with the whole defence expenditure. They have to be ironed out.
The man in the ranks who will do the fighting, the man who leaves his home, who leaves security and a job, the man who leaves his family, is entitled at least to contentment of mind while he is in the service. These irritations ought not to be brought to his attention from time to time, when he receives letters from home.
This may mean stepping up our defence expenditures. I say that because I do not want the members to go into the committee just for the purpose of conducting a witch hunt to see what they can cut off, how they can embarrass someone politically in respect of a contract, or the like. In some instances expenditures may have to be stepped up.
I should like to stress another matter, one which was discussed yesterday afternoon by the hon. member for Lethbridge (Mr. Black-more). I refer to the necessity for assistance to Britain. Looking at our whole defence program, let us not forget for one moment that, in the program we are building up today, Britain is one of our main outposts. If anything happens in Europe, she will suffer the first shot; and unless we can relieve the economic difficulties of that country, as part of our defence program, we will have missed the boat.
Many people in this country and many sections of the press held the view that, with the defeat of the Labour government in Great Britain, Utopia was at hand, that they had reached the millennium. Anyone with any sense knows that is not true. Over there is an island on which there are 45 million people, with resources sufficient to look after about 20 million. I do not care what government is in office in England, the problem is still there.
Britain is our main outpost. Any money we lend to Britain over a long term, as suggested by the hon. member for Lethbridge, is in my opinion insurance in connection with our defence program, and the most important expenditure we could make. Anyone who reads the press today over there must feel pretty bad. In one paper I pick up I see this heading, "Churchill cuts cabinet size." That may look all right, but to me it is just the barometer of what will happen all along the line-more austerity, standards must go
Committee on Defence Expenditures down, "tighten your belt". There is no reason we should live in luxury while those who are conducting our defence across the water must dig deeper in the kitchen, and further reduce their standards.
We owe them something. Not only do we owe them something in this defence set-up, but we owed them something in the last war. They depleted the whole nation, tore their resources to pieces and liquidated their holdings so that they might make a maximum contribution-and they did make it.
I pick up another clipping, and I am convinced that the millennium is not here yet. This one says, "United Kingdom houses to be colder this winter." That is not very encouraging. Should we expect our main outpost to shiver more than they did last winter?- because they were pretty cold last winter.
I pick up another clipping, which indicates how they are reducing their standards all the time, so that they may build up their defences. This clipping says, "Britain has repaid $470,200,000 on Canadian loan." That money could very well have been used in Britain to provide a little more food, warmth and shelter. I am saying this only because in my view the committee should give it some thought. If we are going to talk about defence expenditures, if we are going to see whether our defences are adequate to meet the threat indicated in General Eisenhower's summary of the strength of the enemy we may have to fight some time, then I think our contribution cannot be measured in terms of dollars and cents. It has to be looked at from the point of view that people placed in our strategic position must consider it as our duty to do something to assist Britain in building defences, so that she may assist us if and when a showdown comes. I say this because in my view it should be considered in the commitee.
Then, we realize that it is proper to have sufficient manpower in the services. It is all very well to have a lot of slogans on paper. But when one stops to think for a moment he realizes that in the last war the greatest contribution made toward defeating Hitler, and all that he stood for, was the one made by the productive capacity of the North American continent. If it had not been for United States and Canadian production in the last war we would have had a much worse time. What are we doing about it? Is our productive capacity being properly organized and utilized? I do not think it is. I think we are falling down badly so far as the production of basic steel in concerned, and steel is the main foundation of our whole defence program. We are falling down pretty badly in comparison to the expansion that is going on in the

Committee on Defence Expenditures United States. Steel production is a part of our defence program, and it should be a part. I have in my hand sessional paper No. 161 under date of Wednesday, October 31, 1951. I am not going to read the return as it is available to all members. It shows imports of steel from the United States and steel production in Canada in the form of ingots and castings. It is for 1950 and 1951.
It shows that in the last two years, when we should have been stepping up Canadian steel production, there has been no increase whatsoever. Looking at the figures from January, 1950, to September, 1950, steel production in this country in the form of ingots and castings was static. There was very little change one way or the other. It went up and down a little bit but not enough to matter. For 1951 the figures only go up to August. Apparently the figure for September was not available. There is exactly the same picture. Production went up a little for a couple of months but the figure for August, 286,804, is almost the same as that for September, 1950. There has been no steel expansion in Canada whatsoever.
Let us compare that situation with what is going on in the United States. In the issue of Time magazine for November 12, 1951, one finds on the cover the words, "For Freedom's Forge, More Blast Furnaces". The magazine article on steel is based on a certain personality in the United States who was responsible for building one of the steel industries of that country. There is a short section of it which I should like to bring to the attention of the proposed committee. It reads as follows:
Big steel has to hustle to keep up with the expansion parade, even though it is now spending another staggering $1 billion on top of the $1 billion already spent in the last five years. In Pittsburgh last week, Jones and Laughlin's president Ben Moreell tapped the first steel from a new open-hearth furnace, the first major United States steel plant completed since the Korean war began. It is the first of eleven new furnaces which Jones and Laughlin will shortly finish, to expand its steel production. By 1952's end, Jones and Laughlin will have spent $390 million in six years, boosted its capacity by 32 per cent. By the same time, Bethlehem-big steel's chief rival-will have spent $700 million, boosted its capacity 36 per cent since 1946. Inland is spending $143 million, Republic $250 million, Wheeling $100 million . . .
I shall not read the rest of it. It indicates that the United States recognizes the necessity for expanding its steel production, but in this country we are not doing a thing about it. That is wrong on two counts. First of all it is wrong because we are making ourselves almost wholly dependent on imports from the United States in order to be able to carry out the program that we have mapped out. It is also wrong because this country has facilities
[Mr. Gillis.l
to expand steel production to a greater extent than has the United States, and we are not doing anything about it.
I am not going to read them but I have on my desk briefs from the steel union to the provincial government of Nova Scotia, and the steel controller and the coal board chairman in Ottawa. They cover the last five years and urge that something should be done to expand Canada's steel industry. We certainly have not done so in the last two years. If you will look at the picture you will find that the United States steel industry, which is expanding at the terrific rate that I have just indicated, has not only got control and has us in its lap as far as giving us steel is concerned but has also swallowed up our iron ore resources, with which the future of steel is linked, and has bought heavily of the stock of steel industries in this country. I think at the present time about half the board of directors of the Dominion Steel Corporation in Nova Scotia are Americans. United States capital is coming into this country and buying up the stock of these companies.
That may be the answer as to why there is no steel expansion in Canada. With the development in the United States and partial if not full control of the industry in this country through the boards of directors, the United States interests are certainly not going to develop competition in Canada with themselves. That may be all right from a straight business, free enterprise, selfish standpoint; but when it is considered in the light of our defence program today it is not all right because the production of basic steel in Canada is important and urgently necessary if we are going to meet our defence commitments. I suggest to the committee that one of the things they should ask for is an investigation into the steel industry of Canada as to why it is not expanding.
There is another matter which I wish to refer to the committee, and I have mentioned it a good many times in the house. Any money that the government spends at this time in the creation of war industries should be spent with the end in view of using these industries for other purposes when the war is over. These industries should be dispersed as widely as possible having regard to the raw materials available in the sections where they are established. In time that would bring about a more balanced economy than we have at present. I can never understand why the expansion of steel production on the Atlantic seaboard has not been pushed to a greater extent, if only from the point of view of a business proposition. Nowhere on this

continent can steel, and raw steel particularly, be turned out as cheaply as on the Atlantic seaboard. There is iron ore at your back door. There is the coal necessary to turn out steel. There is a basic plant already in operation that turns out 25 per cent of Canada's total steel requirements. It can be expanded without a great deal of money being spent.
I cannot understand why that has not been pushed unless the reason is that United States capital has been invested in this basic industry to such an extent that they do not want to set up competition with themselves. They may also be afraid of market prospects if and when our defence program is completed. On the Atlantic seaboard the export market is the one they should be considering. When the plant was first established at Sydney it was with the end in view of catering to the overseas market. I suggest that one of the main jobs that the committee should endeavour to do is to take a look at the industries we are setting up in Canada for war production. In the last war we had complete centralization. When the war was over hundreds of millions of dollars of government money that had gone into plants was passed back to the industrialists at about 10 per cent of its true value. Then this war came along and the government has had to buy back for 100 per cent of their value many of the plants which they had disposed of. The people who sold these plants and made millions of dollars do not even have to pay a tax because there is no capital gains tax in this country. This is something this defence committee should look into. If we ever get the kind of war we anticipate, that is an atomic war, decentralization of industry is a "must" unless we want all our plants knocked out at the one time with one or two bombs.
I say that the terms of reference of this committee leave much to be desired as far as I am concerned because what I wanted to see set up was a defence committee which could sit down with the Minister of National Defence (Mr. Claxton) and his deputies and go into the program of defence being mapped out to see if it was adequate to meet the needs at this time.
We have not that kind of committee. This committee is limited to discussing expenditures that have been made. I do not see where it has the power to bring in recommendations. It can make observations and express opinions, but we can do that in the house without a committee. The committee should be permitted to call in defence production and all the other departments which dovetail into the national defence program
Committee on Defence Expenditures and not only scrutinize the money that has already been spent but recommend what other things should be done or should not be done which might require the expenditure of additional moneys. As far as I am concerned, this committee falls short of what is necessary at this time.
One of the first things the committee should do is to order an investigation into the steel industry of this country. We should not be faced with the conditions we are faced with at the moment where unemployment exists in certain cities. Why are these men unemployed? We are told that the particular companies cannot get steel from the United States. I am sure this committee will find out that many contracts that should be under way at the present time are not being worked on because of a shortage of steel.
We were using all our steel to meet ordinary civilian requirements at the time this defence program was inaugurated. This defence program means an increase of perhaps 40 per cent in steel requirements. If we are going to meet the commitments we have made there will have to be an increase in steel production. There has not been any increase. The very base of our defence program is steel. If we use all our resources and productive capacity we can meet our own requirements, but we are not doing that at the present time.
I suggest that it is absolutely necessary to our whole defence set-up that we settle this question once and for all. When a contract is let to General Motors, to Chrysler Corporation or to any company converting to the production of wartime materials, the government should be in a position to know that the steel necessary to carry out that contract is available and that the company taking the contract will not be placed in the position of having to depend on the United States which is using most of the steel it produces today. These companies should not have to finagle around in a black market in order to get steel for legitimate defence contracts. I urge the committee to take a look at the steel picture and try to get some expansion in this country.


James MacKerras Macdonnell: Mr. Speaker, I should like to make a few observations, based, mainly on the remarks of the leader of the opposition (Mr. Drew) and the hon. member for Cape Breton South (Mr. Gillis). The hon. member for Cape Breton South has certainly taken a generous attitude in connection with what this committee might do, but even though it may not be quite as expansive in its operations as he suggests I hope that a generous attitude will
970

Committee on Defence Expenditures be taken in interpreting the duties of the committee. I think what the Prime Minister (Mr. St. Laurent) has said would indicate that that is likely to be the case.
I should like to comment in particular upon one or two things the hon. member for Cape Breton South said. He seemed to me to be putting before us in a realistic manner something that we may be inclined from time to time to forget. I took down one or two things which he said which interested me. First of all he made what might be considered a kind of generous suggestion, but I think if one reflects on it he will see that it was a very practical thing. Speaking about the need of our assisting Great Britain, the hon. member made the general observation that people in strategic spots worse off than we are must be considered part of our duty. You might say that that is going pretty far, yet it is a job in connection with which we need to have everybody wholeheartedly associated. I was glad to hear the hon. member say that, and I hope that a good deal of that spirit will be apparent in everything that we do.
The hon. member for Cape Breton South spoke .at some length about the necessity of increasing the production of steel. My understanding is that our steel capacity is being substantially if not vastly extended. I have been told that and I hope that that will partly answer the question which he raised.
There is a little hobby that I have been riding which I hope may possibly be open for discussion when this committee is assembled. I have a strong feeling that the department of defence, even with the tremendous civilian organization that they have, should have all the expert outside assistance they can get. I pointed out previously that a comparatively small department such as the film board had availed themselves of this type of expert assistance. I was told that these expert companies were only for small institutions. I was rocked back on my heels considerably when that was said, and I know now that it would be hard to imagine anything further from the truth. The actual fact is that large organizations employ them. As a matter of common sense that is what one would expect, and as a matter of fact that is what happens.
The hon. member for Cape Breton South spoke about our duty, as a matter of selfinterest, to assist the United Kingdom and he referred to what they had done. I should like to take just a minute to read an extract from the well-known United States publication New Republic, which I think of as being a rather leftist publication. I did not expect to find it taking such a robust attitude toward
[Mr. Macdonnell (Greenwood) .1
war preparations or in their attitude toward Great Britain. I was pleased to see this headline on the outside cover of the issue of November 5:
Churchill's Tasks
How we can help him to help us
It was the words "to help us" that I liked. Then there is an editorial entitled "Churchill's task" which begins with these words:
Winston Churchill is once again prime minister of Great Britain. We suspect that he could be elected President of the United States.
Then they go on to speak about Churchill and his relation to the Anglo-American partnership. Then later they refer to the importance of a common front in Europe. They speak about the attitude of Churchill as the founder and chief spokesman of the European movement. They speak of Schuman and his desire for unity. Then they say this:
Eisenhower is for it; Truman and Churchill should join in carrying it through.
Then they say:
Churchill takes power at a time when negotiations with Russia seem again to be just over the horizon.
I do not know whether they would write that today.
Churchill can give to these negotiations the confidence and daring that the west has lacked since the days when he and Roosevelt pursued their grand design.
I have wandered a bit afield, and I shall not trespass upon your generosity any further, Mr. Speaker. I would just say that I hope this committee can be of practical value. I should like to reiterate one thing my leader said, and that is to question what I understand to be the rather substantial amount we spend on public relations. When the Department of Agriculture spends money on public relations one may, from time to time, have questions. But if they are sending out recipes for cooking or sending out literature which tells people how to plant better or work their farm better, it is rather difficult to deny that the literature may be useful, even though one realizes that it will come to them through the Right Hon. Minister of Agriculture (Mr. Gardiner), and that of necessity it will inure to the benefit of the Department of Agriculture not only in its technical sense but in its political quality. We cannot help that, of course. For the life of me I cannot see why we should spend money through the Department of National Defence educating the people. I would have thought that the things which need to be done could be done, as my leader has said, through the press. That is one of the things I hope we shall come to in this committee. I again echo the hope of my leader, and of the hon. member for Gape Breton South

(Mr. Gillis), that the terms of reference will be treated in a generous fashion.


Louis Stephen St-Laurent: Just before the motion is adopted, I should like to say that there seems to have been some confusion about what this committee is intended to do. There can be no question about its full capacity to investigate the propriety or otherwise of expenditures for publicity through public relations; that is certainly an expenditure that may be deemed to be in the field of national defence, and will be within the terms of the committee. But it would be wrong to think that this committee is being set up to replace the government or to replace parliament in determining the policies of this country in the international atmosphere that exists at the present time. It will certainly be no part of this committee's function to examine and determine the aid to Britain which this country might extend, because that is a matter which will have to be dealt with by the government and by parliament itself, as do all these major matters of government policy.
The same thing may be said concerning the advisability of expanding steel production in this country. It is a matter of very great importance, but it is not a matter that is going to be turned over to this committee on expenditures. There may be some incidental reference as to the advisability of having a defence commitment made to an industry set up in this particular place in the country, instead of making a commitment to an industry some other place in the country. But the broad policy concerning the distribution of industries in this country, in such a way that when defence preparations are over there will be a better balance in the economy of the nation, is something that parliament will have to deal with. It will not be determined by this committee on expenditures.


John George Diefenbaker: Would the committee be allowed to make a recommendation on a matter such as that?


Louis Stephen St-Laurent: The committee will be allowed to make recommendations or observations on any matter that may arise out of its investigations. If it finds that there have been expenditures or commitments for expenditure that would lead to a policy that the committee would frown upon, I suggest there could be no objection to its observations and recommendations. It is a committee set up for the purpose of doing what the leaders of the three groups have said to be very essential, and which the government considers to be very essential, that is to see to it that, 94699-621
Committee on Defence Expenditures within the policies recommended by the government and accepted by parliament, the country is getting full value for the appropriations that have been provided.
It is not being set up for the purpose for which committees were demanded in previous years, that is to have the committee act as committees do under the United States constitution in preparing estimates, determining what the budgets will be and how the moneys provided in those budgets will be expended. Those are matters to be recommended to the house by the government, and to be determined by parliament itself. Parliament having decided what moneys will be available to the Department of National Defence, I believe it is essential that there should be the closest possible check upon the way in which those moneys are expended. I am sure it is the desire of every hon. member in this house to have that money properly expended', and expended in the manner that will produce the greatest possible value for our defence purposes.
I do not believe there will be any generosity of interpretation of the terms of reference required because they are very specific. The committee is being set up to scrutinize all the expenditures made for defence purposes, and all the commitments for expenditure made for defence purposes. It is no doubt possible the examination will involve examining more than the activities of the defence department itself, because most of the procurement for the defence department, and a large part of the money voted to the defence department, is going to be expended through the Department of Defence Production. It will certainly be necessary to follow it through the Department of Defence Production in order that the committee may be satisfied as to whether or not the money is being properly expended. I believe the committee will not require any generosity of interpretation of the terms of reference and will not attempt to investigate anything but what amounts to expenditures or commitments for expenditure. It may make its observations as to the wisdom of those expenditures or those commitments having been made, but it will not attempt to deal with all those other major matters of policy to which the hon. member for Cape Breton South (Mr. Gillis) referred in his address. He was not suggesting that these matters would be within the scope of this committee, but that he would like to see a committee that would go into these various matters. Well, that is not what we have before us at the present time.
This committee is not a committee to examine whether or not the allowances for :hose who enlist in the services are sufficient;
972	HOUSE OF
Inquiries of the Ministry whether they are generous enough for their dependents; whether the benefits that are provided when they are discharged are sufficient. Those are matters which will be discussed in this house when the estimates are being considered, but they are not matters which come within the check on expenditures or commitments for expenditure of the moneys provided by parliament to implement the policies recommended by the government. I did not take it that the faon. gentlemen opposite were expressing their desire that we have a committee that would operate as do the committees in the United States congress. We have taken the stand that, as far as we could prevent it, we would not agree to have that kind of committee set up. They discussed with me and determined the terms of a reference which would provide for a full examination of the expenditures and commitments for expenditure. I think that the hon. member for Red Deer was right when he suggested that it would be the duty of the members of the committee not to be looking for reasons to criticize but to be looking for something that would be constructive, and that there would be on the other side a duty on the majority members of the committee, representing the party that supports the government, not to block any investigation into some field that might disclose that an error had been committed and should be rectified. I think that the committee will be conscious of its responsibility and will wish to act in a manner that will justify the expression used by one of the hon. members this afternoon, namely that it will be the watch dog for the whole Canadian public with regard to the proper expenditure of the money being raised from the whole Canadian public.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. R. R. Knight (Saskatoon):: Mr. Speaker, in view of the shortage of grain storage facilities that has arisen, I want to ask a question of the Minister of Trade and Commerce (Mr. Howe). I do not see him in his place. Perhaps the parliamentary assistant would take notice of it. Has the minister recently received representations from the Saskatchewan wheat pools as to enlarging the storage facilities for grain at the port of Churchill? Does the government propose to take any action in that regard? The parliamentary assistant is not in the house-


Louis Stephen St-Laurent: I shall be glad to bring the hon.


member's question to the attention of the Minister of Trade and Commerce who, I am sure, will wish to give him a full answer.



EXTRADITION


[Stage Direction]
On the orders of the day:
John George Diefenbaker: In
connection with the supplementary convention dealing with the extradition of fugitive criminals, and in particular with stockateers and racketeers in share sales, I should like to ask either the Prime Minister or the Minister of Justice whether the convention that has been signed provides that there shall be no extradition except for offences that are offences under Canadian as well as United States law?
If I may be allowed to do so, Mr. Speaker, may I say that this question arises because of the fact that some years ago the question arose whether or not the extradition law was going to be amended, and at that time the convention would have allowed extradition for offences created in forty-eight states.
The second question I should like to ask the minister, in connection with the extradition convention that was signed on October 26, is whether or not that will be effectual or operative until such time as it is passed as a treaty by the United States senate. Those are two questions that I think should be answered. In asking the question I would also suggest to the Prime Minister that the convention be tabled.


Louis Stephen St-Laurent: Mr. Speaker, the hon. gentleman was kind enough to call my attention, last Friday I think it was, to an article published in the Financial Post and referring to this convention. As hon. members know, this matter has been under discussion for a long time, and it is to take the form of a treaty which cannot become operative until ratification has been authorized by the senate of the United States, under their constitution. It had been hoped that the supplementary convention could be signed early enough to have it dealt with before congress adjourned, but that was not found to be possible. It was signed on October 26 and it does not become effective until ratified according to the constitutional processes of the two countries. In the United States it requires the authorization of the senate. Under our constitution it does not require parliamentary action but it is, and always has been, the intention of the government to bring it before parliament for

discussion before council recommends to His Majesty or to His Majesty's representative ratification of the convention.
The convention has been drawn in such a way as to provide that there can be no extradition except for something which is an offence under Canadian law. That is a matter that has been the subject of discussions and negotiations over a long period of time. Our United States friends finally realized that we would not go beyond the recommendation that there may be extradition for something which is an offence under Canadian law but not for something which might be set up as an offence in any state of the United States but is not recognized as an offence here.
Because the United States senate could not deal with the convention until 1952, it had not been intended to bring it forward for discussion in the house here until our session of 1952. But there is no objection to its being available to hon. members for their consideration in the meantime. I shall be glad to table it at once, so that it may be available to hon. members and so that, when it comes before the house-which would probably not be until we have fairly firm assurances that ratification was going to be authorized by the senate of the United States -hon. members will have had ample opportunity to consider the terms of the supplementary agreement and to satisfy themselves that the sovereignty of Canada and the liberty of the residents of Canada are being properly safeguarded.


Mr, Diefenbaker:: In reality, then, what it actually does is simply to add, to those offences which are extraditable, two other offences that are today offences against the laws of Canada.


Louis Stephen St-Laurent: That is true.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: I should like to ask the Prime Minister a question with reference to what was Bill No. 401 of last session. The bill was known as the financial administration act and it is designed to take the place of various acts including the Consolidated Revenue and Audit Act, 1931. The reason I ask this question is that it would be helpful to groups on this side of the house, in planning their personnel for the many committees that are meeting at this session, if we knew whether or not this bill is to be introduced. On June 25 the Minister of Finance (Mr. Abbott) said that it would come before us at this session
Agricultural Products Board and that it would go to the public accounts committee after second reading. Is that still the intention?


Louis Stephen St-Laurent: If the hon. member will look at Votes and Proceedings of yesterday he will see notice of a resolution for the introduction of the bill. That resolution will come forward in due course, and it is the intention to refer the bill to the public accounts committee for its consideration, as was stated at the last session.


Stanley Howard Knowles: Very good.



ARMED FORCES DEPENDENTS


[Stage Direction]
On the orders of the day:
Mr. J. A. Blanchette (Parliamentary Assistant to the Minister of National Defence):: Yesterday the hon. member for Red Deer (Mr. Shaw) asked the Minister of National Defence:	Has the government given consideration to the setting up of a dependents allowance board, or some similar board, through which special financial assistance can be granted to the dependents of Canadian servicemen, to enable them to meet medical and hospital expenses?
In reply, may I say that the question of pay and allowances of servicemen is subject to *continuous review. With regard to dependents allowance there is nothing to add to the answer given on March 19, 1951, which appears at page 1373 of Hansard.



AGRICULTURAL PRODUCTS BOARD TO PRESCRIBE THE CONSTITUTION AND POWERS OF THE BOARD, AND TO PROVIDE FOR NECESSARY EXPENDITURES

Right Hon. J. G. Gardiner (Minister of Agriculture) moved: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure for the establishment of an agricultural products board, to prescribe the constitution and powers of the board, to provide for the establishment in the consolidated revenue fund of an agricultural products board account and for payments out of the consolidated revenue fund1 for the buying, storing, transporting or processing of agricultural products (a payment not to be greater than the amount by which $15 million exceeds the balance of the agricultural products board account), and to provide for the salaries or other remuneration to be paid the members, officers, clerks and employees of the board.


Mr. Charlton:: Is the minister not going to make a statement before you leave the chair, Mr. Speaker?


James Garfield Gardiner: Mr. Speaker, I can make the statement either before you leave the chair

Agricultural Products Board or after, whichever is preferred. It appears that it is preferred by some that it be made before.
In suggesting that the authority be given to introduce the resolution for the purpose outlined I should like to make the following statement:
During the war three boards were set up to handle the sale from government to government of food products. There was the meat board set up to administer the agreements between Canada and Britain for sale and delivery of meat products; the dairy products board to administer similar agreements for sale and delivery of cheese; and the special products board to administer agreements for the sale and delivery of other agricultural products. These agreements were entered into and boards established under the War Measures Act.
Following the war an act cited as the Agricultural Products Act was passed in 1947 providing authority to continue the boards with similar powers through the transition period. This act was enacted annually until March 31, 1951, when it was allowed to expire.
The terms of these acts which required the authority provided under the War Measures Act or the National Emergency Transitional Powers Act of 1945 were those which gave powers to the boards in periods of war or emergency which in ordinary times could not be conferred by this parliament.
Those powers had to do mostly with compulsory delivery. It is not intended to confer such powers upon the board being set up by the terms of the proposed bill.
The proposed bill will set up one board composed of persons employed in the different branches of the department which are concerned to purchase and sell farm products. The board will have no authority to compel delivery of a product produced on the farms of Canada. It will only receive the product when the price offered in a competitive market results in its delivery.
The boards set up under the Agricultural Products Act of 1947 served as an agency for the agricultural prices support board in the purchase and sale of commodities under price support programs. When this act was rescinded it was necessary to set up a legally constituted authority to undertake this service.
When it was decided to purchase butter to make possible the carrying out of the effort being made to stabilize the price of butter it was necessary to set up a legally constituted authority to undertake the service.
We have been approached from time to time by other governments to provide an

agency to purchase certain farm products for them in Canada. If it were decided by the government to perform this service it would be necessary to have a legally constituted board.
The government did by order in council 3415 under the Emergency Powers Act set up such a board. It is considered that such a board is necessary to the proper administration of the policies of the department apart from any emergency which may exist, and therefore it was thought proper to have special legislation setting up such a board.
In other words, we have the board set up at present under order in council under the emergency act passed last session; but it is thought proper to have that board constituted under legislation passed by this house in order to provide for the carrying out of other objectives which may not be caused by an emergency, to have this legislation properly set up at this session.
The board provided for will have power to buy and sell agricultural products when an order in council has been passed authorizing the minister to instruct them to do so. In other words, it is not a general power given to the board to go out and buy farm products, but any time that the government determines that it is necessary for farm products to be purchased, either because of activities under the Agricultural Prices Support Act, or because we have been asked to undertake that service to Britain or to some other country that desires to buy food in this country, or when it has been found advisable to buy food in this country for any purpose whatsoever to be utilized probably within the country, this board will be available in order to make these purchases.


John Alpheus Charlton: I was glad to hear the minister's statement in which he said there is not going to be any compulsion about this bill. It is not my intention to take up much of the time of the house on this occasion or to oppose the resolution at this stage. It was my privilege last session to point out to the government the necessity for this legislation in the speech that I made on the budget. I quote from page 2286 of Hansard of April 23:
The Minister of Agriculture (Mr. Gardiner) stated that the four and a half million pounds of New Zealand butter was laid down at Halifax for 40-4 cents per pound and sold for 56], resulting in a profit of at least a million dollars which the government should have had in view of the maintained floor price of 53 cents. The government in effect subsidized a good share of that very juicy profit. In cases where a floor price is being maintained on any product and a short position is encountered, then the government itself, under such conditions, should import a sufficient quantity to satisfy domestic demand.

Just four days later the minister made a report in the house of the change in butter policy, and I want to quote one paragraph of that report as follows:
The government has asked the dairy products board to make a survey of the carry-over as of December 1 in each year, and if it is found that there is not sufficient butter to carry the consumers through to April 1 with a normal carryover, that the board negotiate with those countries whose butter is admitted to Canada on arrangement at a preferred duty for any amount required to be distributed through the trade on the same price arrangement as Canadian butter.
Obviously some kind of legislation is necessary to alleviate a repetition of the butter shortage and the subsequent profiteering of last winter. Whether that butter shortage was as acute as we were led to believe is debatable. Nevertheless butter prices did jump appreciably and importers did make a huge profit.
Some of those who profess to be the strongest advocates of the free enterprise system are doing the very thing that will destroy it quicker than anything else, when they take advantage of a short supply to profiteer at the consumer's expense, while the producer at the same time receives little benefit in respect of storable products.
The position of the dairy industry at the present time is deplorable. Of the thirteen major dairying countries in the world, Canada is the only one which showed an over-all decline in milk production between the years 1948 and 1950. While the human population in Canada has increased by two and one-third millions in the last eight years, the number of milch cows has reached the lowest point in twenty years. Milk production is down by over a billion pounds since the end of the second world war. Milk production per capita has declined from 1,500 pounds in 1942 to less than 1,200 pounds as estimated for this year.
Annual butter production has declined by more than 40 million pounds in the last three years, the lowest on record for twenty years. Cheese production has dropped from 189 million pounds in 1945 to less than 100 million this year.
Mr. W. Frank Jones, president of the Borden Company, Limited, and past president of the National Dairy Council of Canada, in an address before the Ontario Agricultural College alumni association in Ottawa on October 26, 1951, gave the following reasons for the decline in production:
The relatively higher returns from other types of farming such as beef cattle, grains, hogs, poultry, etc.; the relatively onerous nature of dairying making it increasingly difficult to obtain or retain the farm labour required; the competitive impact of substitutes for dairy products manufactured from
Agricultural Products Board imported vegetable oils, and, contrary to the general impression among hard pressed consumers, the relatively low consumer prices for dairy products.
And again:
Answering criticism as to milk and butter prices, Mr. Jones quoted official data showing that "Canadians now have to work less time to buy a quart of milk than they did in 1939. In 1939 an average hour's work in manufacturing industries paid close to 43 cents, enough to buy just over three and a half quarts of milk. Today the same work pays $1.18, enough to buy more than six quarts of milk, or just about twice as much. As at July 1 of this year it required only 34-7 minutes of working time to buy a pound of butter compared with 41.2 minutes in 1939."
Obviously federal government policy has been the cause of most of the trouble, and it is within their power to rectify the situation. I shall reserve further comment until the bill is brought forward.


Mr. P. E. Wright (Melfort):: Mr. Speaker, I should like to say a few words in this discussion, as this may be the only opportunity we will have at this short session to discuss agricultural matters. There will be no estimates, and no supply voted, so I would hope that some latitude would be given in the discussion at this time.
As the minister has said, the resolution foreshadows the introduction of a bill which will establish again an agricultural products board. In 1950, when we passed the amendment to the original Agricultural Products Act, which extended the life of the board until March 31, I believe it was, of this year, I suggested we should be making this a permanent act, I was sure in my own mind that, if we were to have any orderly marketing of agricultural products in Canada, it was necessary to have a board with the functions which I presume this board will have. I refer to the functions of purchasing certain agricultural products at floor prices, which may be established from time to time under the Agricultural Prices Support Act. I agree with that principle, and that we should have a board of this description.
The hon. member for Brant-Wentworth (Mr. Charlton) has just given us a review of the dairying situation in Canada as it applies to butter. I should like to say a few words in that connection. Originally, under the Agricultural Prices Support Act, a floor price for butter was established in Canada at 53 cents. At that time dairy producers informed the government that they did not believe that was a satisfactory price, and felt production would be likely to drop if the floor were not established at a higher figure. Such proved to be the case. As has been mentioned by the hon. member for
97$

Agricultural Products Board Brant-Wentworth, there was a reduction in production in the last three years to the extent of about 40 million pounds.
Again last year the floor was established under the Agricultural Prices Support Act at 58 cents a pound, to be effective for the next two years. Again the dairy producers, particularly the cream producers, whose product is used in the making of butter, approached the government and stated that this price was too low to bring about increased production or even to maintain the production we then had. This, too, has proven to be true.
The government admitted the truth of it when, a month or two ago, it offered to purchase in Canada up to 10 million pounds of butter at 63 cents a pound. So that at this time we have an effective floor under butter of 63 cents-at least we have it until the order in council is repealed, or the government decides it has enough butter. I do not believe it is receiving any butter under that offer at the moment. Butter is going to the regular trade at something slightly above that price.
At the same time the government decided there was a shortage of butter, and established a policy of making butter purchases abroad. If my information is correct, that purchase is costing the government something slightly less than the 63 cents they are offering on the domestic market. I do not know just how accurate that figure is, but perhaps the minister will tell us when he speaks.
Anyway butter is being imported. I would suppose that one of the first functions of the board to be set up under this legislation, and perhaps one of the first expenditures out of the $15 million suggested in the resolution, may be in connection with the purchase or sale of butter. I do not know whether the government will suffer a loss on the purchase -I do not think it will, as a matter of fact, under present conditions. At the moment I believe it is offering butter to the trade at 66 cents. Then that butter finds its way to the domestic market through the regular channels. I do not know how the butter that is being purchased is to be sold. I hope the minister will tell us on what graded basis it is being sold to the trade. I should like to know whether it is being sold on the basis of Canadian standards of grades or on some other standards of grades that the government may have set up for the sale of that butter. I think the dairy producers of Canada would be interested to know to what grades that butter must conform before it enters the retail trade.


The seriousness of the situation in the dairy industry, as outlined by the hon. member for Brant-Wentworth, is such that we must give some consideration to it. There has been a drastic reduction in the production of dairy products, more particularly butter. As I see it, the situation is that the present price for butter in Canada is not attractive enough to the dairy industry to bring about an expansion of production. Even with the present floor price of 63 cents, it is quite evident that production is not increasing. As a matter of fact 63 cents for butterfat works out to approximately $2.25 a hundred for milk. According to the last market report that I saw, the average price paid for butterfat in most of the dairy districts of Ontario was 66 cents, and I believe 60 cents in northern Ontario. Even at 66 cents for butterfat, that still leaves whole milk at about $2.50 a hundred.
Milk is going into the whole milk trade in Canada at an average price of approximately $4.35 to $4.50. That means that milk going into the whole milk trade is bringing approximately twice as much as milk sold for its butterfat content to enter into the production of butter and cheese. What is the result? Many farmers in the outlying areas who are not in the whole milk trade find that it is not very remunerative to them to maintain even the herds that they have at the present time. They are being offered pretty fair prices for their breeding stock and as a result it is being depleted both for export and to enter into herds that are engaged in the whole milk trade. There are a large number of commercial herds in Canada, especially in northern Ontario and in other areas that are engaged solely in the production of milk for the whole milk trade. They buy a lot of their concentrates and all their breeding stock. The only place where they can purchase breeding stock is from farmers who are engaged in the production of milk for its butterfat content.
As their herds are depleted the source of breeding stock is drying up, and we are also exporting breeding stock to the United States. This must result in a serious situation. It has been gradually developing over the last two or three years with the result that the whole dairy industry is becoming disorganized. It is easy enough to review what is happening. We can see that, but it is another thing to suggest an intelligent remedy, something that will stop the decrease in the production of breeding stock in Canada and in our ability to produce the essentials of life. The reduction in the consumption of whole milk in Canada is a serious thing to the health of our people. I do not think that the continued use of substitutes for our

regular dairy products is good for the general health of the people of Canada. I do not believe there is anything that can take the place of good wholesome dairy products, whole milk, butter, cheese and so on.
As we decrease our ability to produce these products in Canada we are bound to decrease our ability to maintain our health standards. If the government want to increase breeding herds I suggest that they have got to subsidize butter and cheese. I do not see any alternative. They have got to subsidize the production of butter and cheese to the point where it will at least be remunerative to the producers of these products to continue and increase their production, and to increase their herds and breeding stock. Otherwise the present decline is bound to continue. It is quite evident from what is going on that producers are not going to increase production at present prices, and it is also quite evident that the consumer is not prepared to pay more than he is paying today for these products.
I agree with those who have stated, as the hon. member for Brant-Wentworth has said, that the consumer is spending dollars for food that will not bring him the same amount of food value as the same amount of money spent on dairy products, even at higher prices than they are bringing at the present time. Nevertheless we must recognize the fact that consumers are not prepared to pay more than they are paying at the present time. At present prices they are reducing their consumption, and if prices go higher what is going to happen to the consumption of these products? There will be a switch to substitutes. I think this is one place where a government subsidy could work to good effect. I think the government should subsidize the production of butter and cheese to the point where producers will continue to produce and maintain their herds and breeding stock. Otherwise I see no alternative but a continued decline in our production, and Canada will become an importing country so far as some of our dairy products are concerned.
As I said before, if we do that we will reduce the ability of our whole milk producers to obtain the necessary breeding stock to maintain their herds and to continue their production of whole milk for our trade. Last winter in many places in Canada, not only in the larger cities but also in some of the smaller towns, particularly in western Canada, whole milk was being made out of powdered milk to supply the whole milk trade. Not enough whole milk was being produced in many rural areas, let alone large city areas, to meet the demand. This situation is bound to continue unless the government
Agricultural Products Board are prepared to do something about it. I think the setting up of this board is a step in the right direction. When it is set up I hope that under it the government will do more than it has been doing to date to support the dairy industry of Canada which is so important to our economy and the health of our people.


Mr. Robert Fair (Battle River):: Mr. Speaker, like the hon. member for Brant-Wentworth (Mr. Charlton) and the hon. member for Melfort (Mr. Wright), we in the Social Credit group are pleased that the minister has moved this resolution today and is basing upon it a bill which he expects to introduce in the near future. He has given an outline of some of the duties of the board, and in order to transact necessary business we feel that the board should be set up. In fact when I heard recently that the government had bought some butter I wondered what agency had been used to make that purchase. Having been told by the minister that a board has been set up by order in council I believe I now have a reply to that question.
I think many people in Canada misunderstand our whole agricultural program. We are going to set up a committee to deal with things that are costing too much and I submit that it would be only right to set up a committee to find out why the prices of agricultural products are as low as they are at the present time. It is true that the index for agricultural products has risen considerably since 1943 or 1944, but many people do not realize that the base period of 1939 was a period in which we were obtaining depression prices. The result is that the index is not accurate because we were not even getting the cost of production at that time. I was surprised at a statement made on October 17, 1951, by the hon. member for Quebec-Montmorency (Mr. LaCroix), who is reported on page 147 of Hansard as having said:
Until recently, horses slaughtered in Quebec were used in the manufacture of glue; henceforth, people in the poor and medium classes who make up the majority of wage earners in Quebec will have to eat horse meat because of the great care taken not to incur the disfavour of electors in western Canada, not by one group only but by all political parties represented in the house.
I beg the government to act without delay to put a stop to this situation whereby the people of western Canada force the inhabitants of the east to eat horse meat.
I want to deny emphatically that the people of western Canada are asking the people of Quebec or any other province to eat horse meat. That is entirely their privilege. We are not dictating to them what they shall eat, but we are endeavouring to the best of our ability to supply the highest grade product

Agricultural Products Board that can be produced, and I think we are successful. The hon. member goes on:
In my opinion, such a step would foster unity in Canada, because it would show, in a practical way, that there exists, in critical times, a national solidarity among the various parts of this country.
The gun is heavily loaded against western agriculture at the present time. No doubt the hon. member for Quebec-Montmorency is eating bread made from western Canadian wheat and he should realize by this time that the western wheat grower is subsidizing him and all other consumers in Canada to the extent of 50 cents per bushel so they may have that good cheap bread. He goes on:
National unity should work both ways: since each year taxpayers in eastern Canada make sacrifices to help the western wheat growers, the latter should also make some concessions to their fellow countrymen of the east.
No doubt the hon. member is referring to the $65 million which has been talked about so much, sometimes by people who do not know what they are talking about. I think the hon. member for Quebec-Montmorency can be included in that group. When we were discussing the $65 million it was brought out that the western wheat farmer had lost 32 cents per bushel on that deal, or approximately $137 million, in order to supply cheap wheat to the people of Canada during the period 1946-49. The hon. member continued:
The greed and selfishness of certain western meat producers at the present time will bring about, sooner or later, reprisals from the east.
I do not think it is necessary to say anything more except that people who do not understand what they are talking about should learn something about their subject before making statements of that kind.
On Monday, October 29, the hon. member for Three Rivers (Mr. Balcer) made the following statement, as reported on page 491 of Hansard:
Again I urge the government to prohibit immediately all meat exports to the United States, so that the price of beef, for instance, which is a basic food, may return to a level that would be commensurate with the income of the average Canadian, while still enabling western cattle breeders to make a reasonable profit. As long as we export our meat to the United States where salaries are much higher than in Canada, our fellow citizens will have to go without meat or pay excessive prices.
Our choicest meat is sent across the border and horse meat is the only kind available at reasonable prices in Canada.
The situation is such today that it costs less to buy beef from cattle slaughtered in Argentina, exported to Britain and tinned there, then reexported to Canada, than it is to buy beef from our own Canadian west. This is a ridiculous situation. The government is duty-bound to react and to leave no stone unturned in order to put an end to it.
There is another case where the hon. member does not understand what he is talking about. If he knows anything about the

grade of beef that you get in a can, he will realize that it is the same type that is produced and canned in his own province. It is about the same quality as the animal that has raised two or three families and then when it is all through is slaughtered and put in a can. When the hon. member gets quality meat from western Canada he should be satisfied to pay for it. I would point out that during the depression years 1930-40 the farmers in western Canada were selling beef for one cent a pound. At that time we did not hear the hon. member for Quebec-Montmorency or the hon. member for Three Rivers ask for an increase in the price to a level which would be near the cost of production. They should get a little history into their heads and then perhaps they could talk with some common sense in the house.
We must realize that something is wrong with our agricultural program in Canada when we have to import butter and eggs. Last year we heard many complaints from people in different parts of the country about the price they had to pay for butter. I hope the action being taken at this time by the minister will prevent such things happening again. I realize that people on low salaries cannot pay one dollar a pound for butter under present conditions.
We must establish parity prices for agricultural products in Canada. Across the line they have had parity prices for a number of years. We in Canada seem to be fond of following their programs in the United States but from year to year we hesitate to follow their lead in formulating a parity price program.
I suggest to the minister that he should have written into the Agricultural Prices Support Act a formula to provide parity prices for agricultural products. In doing that we should not go back to the depression years of 1930-40. If that is done we shall not be any better off with our Agricultural Prices Support Act and our agricultural products board than we have been in the past. The base period should be a period in which the farmers received a reasonable price for their product. If a formula on that basis is laid down in the Agricultural Prices Support Act the farmers of Canada will stand a chance of getting a fair deal, something which up to the present they have not received.
I am not going to say very much more, except to state that once again we have heard the farmers of Canada being blamed for the high cost of living. I believe the Prime Minister, when he spoke on the address

Agricultural Products Board
in reply to the speech from the throne, produced figures which show that the farmers' produce is being sold at lower prices-except for one item, steak, which many people do not eat at the present time-than has been the case for many years. I am suggesting that the people who buy the farmers' produce, then process it and retail it are making profits to which they are not entitled. That again is not the fault of the primary producer who does all the work and gets the least credit for it, and who has less of the conveniences of life than any other occupational group in the country.


Mr. W. G. Dinsdale (Brandon):: I should
like to add a few remarks to this discussion, Mr. Speaker, mainly with reference to a resolution passed by the Brandon city council, and which was forwarded to me recently. I believe it is a proper resolution to introduce at this time; because it expresses the opinion of a large group of the constituents I represent in this house. The resolution states:
Whereas it has been generally recognized that milk is one of the most nourishing and beneficial foods for children, and it is therefore in the general interests of Canada that ample supplies be made available to- all families at a price within their means; and
Whereas the cost of milk to the consumer in western Canada has doubled since the year 1946 when the federal government removed the subsidies which were in effect throughout the war years, with the result that milk consumption by families in the lower income brackets has sharply declined; and
Whereas there is every indication of a continued spiralling of retail milk prices, which can only have a further detrimental effect on the health of children of families financially unable to provide them with adequate milk supplies.
Now therefore the council of the city of Brandon respectfully urges the federal government to restore milk subsidies in such form and amount as may be necessary to maintain an adequate supply for Canadian consumption at reasonable prices.
I bring that to the attention of the house hoping it may be considered pertinent to the resolution that has been introduced this afternoon. While I am on my feet, I should like to enlarge upon the theme that has received some attention this afternoon, namely the plight of the dairy industry in Canada. I believe most members have had this, topic brought forcibly to their attention recently as a result of the numerous cards that have been coming in from representatives of the dairy industry. I am sure we are all in agreement that the dairy industry is one of the most important in the Dominion of Canada. I have some statistics which were supplied by a past president of the National Dairy Council of Canada which amplify that point. The annual value of dairy products is about one and one-half times the output of electrical apparatus and supplies. The value of the
production of the dairy industry is twice as much as that of the automobile industry. Dairy products are worth about four times as much as the total production of gold and silver combined. Among all the industries of Canada, both agricultural and industrial, dairying ranks among the first three in gross value of produce. All this would lead us to the conclusion that dairying is indeed one of the major industries in Canada.
To bring another aspect of the problem to the attention of the house, let me state that many statistics could be cited as to the number of dairy farmers, the number and variety of dairy plants and the value of these plants; but if it is shown that 17 per cent of the people in Canada, either directly or indirectly, are dependent upon dairying for a livelihood, one can appreciate the importance of this industry to Canadians. It is particularly significant, I believe, that all countries with high standards of living are, without exception, great users of dairy products. More recently the countries that have acquired national autonomy, such as Israel and India, are busily engaged in buying large quantities of dairy products.
This afternoon we have heard of the healthful benefits of milk, ice cream and other products of the dairy industry. I am sure we can all recall our youthful days when the virtue of the consumption of adequate quantities of milk was indelibly impressed upon our minds. Even though as we grow older we sometimes forsake the consumption of that particular beverage for other forms of refreshment, I think we will all agree that the consumption of milk in proper quantities is important to the health of the nation. I recall that during the war it was compulsory for aircrew serving in operational theatres to have a daily supply of milk, not powdered milk but fresh milk. Apparently the authori- -ties responsible for the welfare of air force personnel considered that it was important to have fresh milk in preference to powdered concentrates. Again I also admit that was not the only liquid refreshment consumed by members of the aircrew. In support of this view we can also cite the fact that the United States navy considers the consumption of ice cream of sufficient importance to instal manufacturing apparatus on board ships. Not only is it beneficial as a food, but they consider it important to the morale of the men serving on board ship.
Having said all this, the very obvious fact before the house this afternoon is that we are faced with a decreasing production of dairy products. It is well known that exports of

Agricultural Products Board dairy products have declined since the beginning of the century. While the export of dairy products has declined, the domestic consumption has increased to the point where today we are faced with a situation in which domestic consumption almost absorbs the total production. As a matter of fact, with the rapidly increasing population of Canada, before long we shall be faced with the situation that our production of dairy products will not be sufficient for domestic consumption. No doubt the cause underlying this basic change is the process of industrialization and urbanization that has been going on in Canada with increasing rapidity during the first part of this century.
I feel it is also significant that population increases based on the average figure of 2 per cent annually or some 280,000 persons, means that the equivalent of an entire city must be supplied with dairy products as an additional drain on our agricultural resources each year. If you line this up with the fact that there is a decreasing production of dairy products, you can see that inevitably you are faced with a dilemma. It is true that notwithstanding the increase in population that has already been pointed out in this discussion today, the total milk production decreased by approximately 1 [DOT] 2 billion pounds or 7 per cent during the past five years. There has also been a proportionate decrease in the number of milking cows during that same period of time, to the extent of some 501,500 head, which is a percentage of 12-5.
It has been pointed out that these statistics have some relationship to the tendency to supply a larger part of the meat market with dairy cattle. It is obviously more profitable at the present time to raise cattle for meat than to be faced with the increased labour costs that are a concomitant of the dairy industry. As I have already indicated, the dairy farmer is faced with increasing costs and is faced with the fact that the farm industry, particularly the dairy industry, has now become part of our pecuniary economy; we must reformulate our thinking as to labour costs and the prices received for dairy products in the light of those radically changed circumstances. It was brought to our attention that, in comparison with other prices, the dairy farmer is receiving relatively low prices. I have some statistics that could be brought before the house and which demonstrate that point.
It is significant to note that, at March I last, in computing the cost of living index it was found that all food stood at 233 [DOT] 9.

When this item of food was broken down into dairy products and other products, however, it was found that dairy products stood at 200-1 while other products stood at 247 -5. The base period was 1935 to 1939 with an index of 100. This means that, although dairy products as a group have doubled in price, other foods were about two and a half times as costly as in the base period. If the indices of individual foods are examined, the comparable indices of some are as follows, and these figures are for April 1 of
this year:
Milk	 177-1
Bread	 189-8
White sugar	 194.5
Eggs	 198*8
Pork fresh loins	 247.7
Steak sirloin	 344-8
Roll rib roast	 373-1
It can be seen by comparison that the price of dairy products has increased at a relatively lower rate.
This brings me to just a brief remark concerning a major problem that is faced by the dairy industry at the present time, a problem that has been brought to our attention by the influx of these cards which we have been receiving through the mail; I refer to substitutes for dairy products. Last year 94 million pounds of margarine were used. This figure is more than the total production of creamery butter in the province of Quebec.
I am informed that the use of vegetable oils as substitutes for dairy products can be increased almost indefinitely; they can be used for synthetic or artificial cream, for ice cream and even as a substitute for milk itself. There is confronting the dairy industry a real difficulty which will have to be faced, obviously; and it is a part of the general problem of decreasing production in the dairy industry. In these little postcards we have been receiving the suggestion is put forth by the dairy industry that some reasonable and suitable tariff be imposed on the importation of cheap vegetable oils so that the industry will be placed on a fair and equitable competitive basis. After all, to most articles manufactured in Canada the same type of protection is afforded. It would seem to me, that the dairy industry is only asking for the same fair and equitable treatment.
As these processes continue, the net result can only be a further decline in the dairy industry and inevitably-or even now in some products, for example, butter-we shall be faced with shortages.
I should just like to make this observation here. Presumably it is not the first time it has been made in this house, but I should like to repeat it for the sake of emphasis.

This matter has rather serious implications for our defence program. I am sure that the members of the government, as well as the members of the house generally, are aware of these serious implications. As I recall it, during world war II one of the notable contributions of Canada to the war effort was the magnificent rate of production maintained in all agricultural products, particularly dairy products.
I would bring my remarks to a conclusion by stating that a healthy dairy industry is essential to the general economic well-being of the country. During recent weeks the minister of agriculture for the province of Manitoba has been taking as his dominant theme in discussions throughout the province the necessity for encouraging mixed farming in Manitoba and in the prairies generally. His conclusion has been exactly the same as the statement I have just made, namely that a healthy dairy industry is necessary, and that encouragement of general farming is necessary for the general economic well-being of the country.
I would emphasize again that, in the deliberations of the agricultural products board, consideration be given to some of the remarks that I have made this afternoon. I realize that the solution to the problem outlined in the resolution submitted by the Brandon council is perhaps a little bit more difficult than they have indicated. However, I think it only right and appropriate at this time that it be brought to the attention of the house for consideration generally, and particularly as discussions continue with reference to the resolution we now have before us.


Mr. Donald B. Blue (Bruce):: Mr. Speaker, it was not my intention to take part in the debate on the resolution that is now before us, and consequently I had made no preparation. But I feel I would be unfair to the constituency I represent, namely, Bruce, and the people of that constituency, which is the largest producer of butter in the Dominion of Canada, if I did not say a few words. After having heard the statements made in this house by some hon. members I just wonder whether they know on which side of the cow to sit.
Speaking of dairy products, I farmed for 44 years and I was proud of my profession as a farmer. I did not go too far away from it. I manufacture bread, thereby consuming flour grown in western Canada. I think it is unfair to tell me or to tell the people of Bruce that we do not know how to run our business. I am in the auctioneering business as well. I know that it takes only a simple education to understand the two professions that I am in,
Agricultural Products Board but I do half a million dollars' worth of business a year with the general public, and I say that the farmers are the best people that one can meet.
I received the cards which the previous speaker mentioned. I answered them. If they are willing to accept my solution, very well. There are laws of this land which put an importation tariff on butter. There is a tax on margarine; but I am going a little further than that. I am going to say in the House of Commons what I have said to them. I keep store. I have margarine and I have butter. If I had sufficient butter to replace the margarine on my shelves I would feel sorry for the man who is milking the cow. I do not think it is fair for any of us to make prejudiced statements against the other fellow's profession. This is a free world and we should let everyone choose for himself. I know that beef has put the dairy cow out of her position today. We all know that. There is not an hon. member in the house who does not know that, if he has any intelligence at all. But I can remember the day when the dairyman had his inning against the beef man. I am defending Bruce today, and I want to defend it because I think they are the best people in the land, and Canada is the best country in which to live. I am going along with the people of Bruce. I want them to keep cows because it is vital. The population of Canada is rising, and so is the population of the United States. But the time may come when the quota on cattle going to the United States may be reconsidered. I know that beef cattlemen realize that. But I tell everybody to milk cows, because it is a fundamental practice of the nation, and my constituency will do its part. It is the largest producer of butter in the Dominion of Canada. Thank you.
At 6.15 p.m. the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Mr. H. R. Argue (Assiniboia):: Mr. Speaker, the resolution introduced this afternoon by the Minister of Agriculture (Mr. Gardiner) will make provision for the establishment of an agricultural products board, on a more permanent basis. Certainly we in this group made it abundantly clear in the house more than a year ago that we were in favour of extending the Agricultural Products Act. Consequently we are glad to see that the Minister of Agriculture is now agreeing with us and is now making provision for the establishment of an agricultural products board, on a permanent peacetime basis.

Agricultural Products Board
From the statement made by the minister it seems clear that this board, if directed so to do by order in council, may do almost anything in the way of buying, processing and marketing of agricultural products. The minister said the board might be used as an agency to carry out the purposes of the Agricultural Prices Support Act. A board of this nature, said the minister, could be used upon the request of a government of another country, such as the government of Great Britain, for the procurement of agricultural products within Canada. The minister said, pointing out a third activity the board might take, that if it were found advisable it might buy food here in Canada for any purpose. It is clear therefore that the possible scope of the board's activities is great indeed.
Once again however there is a serious fault, a fault that runs right through legislation which has been presented by the Minister of Agriculture over the years dealing with the marketing of agricultural products. Once again there is no guarantee that the price support which is set will in fact cover the farmers' cost of production. There is nothing in this measure, as outlined by the minister, to guarantee to agricultural producers in Canada a fair share of the national income or a reasonable standard of living.
If we are to judge the likely effect of this measure by steps taken by the government in the past in the same field, then I am afraid we will once again find floor prices set too low, with a consequent dwindling effect on agricultural production. What the farmers of Canada want and what they have a right to demand is that the government introduce legislation in which the formula is spelled out and in which, in clear and concise terms, the farmers are given a real guarantee that, year in and year out, floor prices will be adequate.
As I have already said, the minister mentioned that a measure of this kind might be used, if the agricultural products board was directed in council, to buy up Canadian agricultural products to supply to countries such as Great Britain. I am afraid that in the present state of international affairs, and the announcement by the government of the United Kingdom that they would endeavour to save a billion dollars in the purchase of commodities in the dollar area, the chances of this measure being used to increase our exports of agricultural products to Great Britain are indeed limited.
I was pleased to hear the Prime Minister (Mr. St. Laurent) announce earlier today that Mr. Churchill, the Prime Minister of the United Kingdom, would pay a visit to Canada

in the early part of January of next year. I suggest to the Minister of Agriculture that he discuss with the Prime Minister of Great Britain not only the necessity of there being no reduction in the purchase of agricultural goods in Canada, but that the minister discuss with the Prime Minister of Great Britain ways and means of increasing the supply of agricultural products to the United Kingdom.
In the past the minister has said many times that he believes the United Kingdom is Canada's best permanent market, outside our own country. I agree with that statement. And so I suggest that the government do everything possible to see that that market is increased. I would like to see the Minister of Agriculture call a conference and invite to that conference members of farm organizations and of co-operatives. If we are to increase our sales of agricultural products in Britain, then I think it follows that Britain must have an increased supply of Canadian dollars. The British have a fine farm machinery industry, and I believe there is a potential market in Canada for large quantities of British-made agricultural machinery. Therefore I suggest that the minister discuss with farm organizations the possibility of obtaining and handling on a permanent basis large quantities of British agricultural machinery. I suggest that he discuss this matter with Mr. Churchill, when he visits Canada early in January, to see if something cannot be done not only to prevent a reduction in agricultural goods going from Canada to the United Kingdom, but with a view to increasing substantially Canadian exports to Great Britain.
In the last day or so I have reviewed support prices at present in effect in Canada. Hogs are supported at $32.50 per hundredweight f.o.b. Halifax, basis Wiltshire sides. Well, as the hon. member for Selkirk (Mr. Bryce) said yesterday, a Wiltshire side is not a hog; and when the farmer gets paid he knows very well that the hog is a long way from the Wiltshire side; because the price he has received in the last few months is a long way from the support price he had expected. A price of $32.50 a hundredweight at Halifax amounts to only $30.35 for a grade A hog at Regina on the basis of a Wiltshire side, and so far as the price that the farmer receives for that hog is concerned it is estimated to be in the neighbourhood of $26.50 per hundredweight dressed weight. The table placed on Hansard yesterday by the hon. member for Selkirk demonstrates very well what needs to be done in a measure like this to guarantee the hog industry in Canada more stability. I ask the minister if there is any incentive for a farmer to raise hogs when he sees the price of hogs drop

by $8 a hundredweight within a period of a few weeks. I know many farmers in my area who, finding last fall that they had large quantities of feed wheat and other feed grains on hand and seeing that the prevailing price was reasonably good, decided to produce more hogs.
I know one chap who had eighty, and the price was $35, $36 or $37 a hundredweight until about the time that his hogs were ready for market. Then so far as he was concerned the bottom literally dropped out of the hog market. Through reduction in the price of hogs that farmer lost at least $12 a hog, or approximately $1,000. There is no incentive for a man to remain in the production of livestock if he suffers such a loss within a few weeks at the very time when he expects to market his yearly production of hogs. As I have already said, I think that a formula should be placed in this measure to guarantee farmers, if not parity prices, at least a high percentage of parity based on an adequate formula. If the minister will guarantee the farmers of Canada not high prices, not low prices, not highly fluctuating prices but reasonable prices for hogs and other agricultural products year in and year out, our farmers will increase their production and will increase the supplies of all those commodities that are so important to the health of the people of Canada and the well-being of the people of the world.
The government has a floor price under eggs of 38 cents a dozen for grade A large. The government stands prepared to buy grade A eggs at 38 cents a dozen in the spring when there may be a surplus. Because the floor price was set far too low many poultry producers became discouraged and sold their flocks. Because the floor price was set too low over a year ago we have seen periodic shortages of eggs and very high prices for them during such shortages. Last September a couple of friends from Ottawa visited us. We asked them what they were paying for eggs in Ottawa and they said 89 cents a dozen. The farmers of our district were obtaining 42 cents a dozen for good eggs at that time in the local town. According to our visitors they were much better eggs than the grade A eggs they were buying in the Ottawa stores. There is something wrong when the consumer in Ottawa pays 89 cents a dozen and the egg producer in Saskatchewan only gets 42 cents a dozen.
Yesterday the hon. member for Selkirk suggested that an inquiry should be made into the packing house industry to see why there is great disparity and fluctuation between the prices paid to farmers for hogs and the high prices paid by consumers for pork products. I think an investigation should
Agricultural Products Board also be made into the packing industry to see why there is such a large spread between the price to the egg producer and the price the consumer has to pay. I have my own ideas as to why that great disparity exists, and I am sure one of the reasons is that the packers are making an unduly large profit from the handling of eggs. When our producers sell their eggs they are always told there are a large number of B's and not many A's but it seems that for some reason only the good eggs ever reach the counters where they are sold at a pretty high price. The present floor price under butter is 48 cents a pound.


John Alpheus Charlton: Fifty-eight cents.


Hazen Robert Argue: The hon. member for Brant-Wentworth (Mr. Charlton) is quite correct. It is 58 cents and the floor price is established for a period of two years. However, a government board has been endeavouring to buy butter at 63 or 64 cents a pound. Therefore while the floor is only 58 cents a pound creameries are being offered a higher price. When the government was considering the new support price for butter I asked on April 13 of this year if they would not consider establishing a price of 62 cents per pound as requested by the Canadian Federation of Agriculture at that time. The floor price that was announced was lower than that. In the meantime the board is attempting to buy butter at a price more nearly comparable to the floor asked by the Canadian Federation of Agriculture. All I am saying is that when the government announces a floor price, such as the 58 cent floor on butter, a price that is below the cost of production, production is discouraged. Because production is being discouraged through low floor prices, supplies shrink and the consumer pays an unduly high price for the product at some future time.
The scope of the resolution moved by the Minister of Agriculture is pretty broad. It provides that the agricultural products board may buy, store, transport or process agricultural products. The board has wide scope but the extent to which it operates will depend upon the instructions it receives from the governor in council. The United States has had a good deal of experience in the field of support prices for agricultural products. They have a board somewhat similar to the agricultural products board envisaged by the resolution. It is known as the commodity credit corporation and the act under which the corporation operates authorizes it to do certain things. They are:
(1) Support prices of agricultural commodities through loans, purchases, payments, and other operations; (2) make available materials and facilities required in the production and marketing of agricultural commodities; (3) procure agricultural commodities for sale to other government agencies,

Agricultural Products Board
foreign governments, and domestic, foreign, or international relief or rehabilitation agencies, and to meet domestic requirements; (4) remove and dispose of surplus agricultural commodities; (5) increase domestic consumption of agricultural commodities through development of new markets, marketing facilities, and uses; (6) export or cause to be exported, or aid in the development of foreign markets for agricultural commodities; and (7) carry out such other operations as congress may specifically authorize or provide for.
The charter of the commodity credit corporation of the United States is broad in its terms and the fact that it benefits the United States producers I am sure is unchallenged by any thinking United States citizen or any thinking Canadian. In this report of the president of the commodity credit corporation for 1950 is outlined the United States policy and formula in regard to the marketing and handling of many agricultural products. One agricultural product after another is mentioned. On reading this report one is impressed with the fact that the United States agricultural producer is getting a square deal while the Canadian agricultural producer is getting rock-bottom floor prices and is being forced to curtail production of many commodities.
In 1950 the United States producer of corn got a price that was 90 per cent of parity. In the case of cotton, the same 90 per cent of parity was guaranteed. Their parity prices are invariably high. In 1950 the wheat producer was guaranteed 90 per cent of parity or $1.95 per bushel. Today the commodity credit corporation guarantees the United States wheat producer 90 per cent of parity or $2.17 per bushel.
I ask how does the Canadian wheat producer fare in comparison? That is not all that the United States wheat producer gets. He gets the prevailing market price even though that price be 40 or 50 cents per bushel higher than the support price, as it is now. The Canadian farmer gets much less and is guaranteed much less. Here are some more guaranteed commodity prices;
Per cent of parity
Butterfat	 90
Milk	 79
Barley	 72
Beans	 80
Cottonseed	 90
Eggs	 90
Oats	 90
Rye	 72
In other words, under the United States legislation the producer is guaranteed a high percentage of a reasonable parity price. I plead with the minister to include, in the bill that this resolution foreshadows, a clause which will guarantee the Canadian producer a high fixed percentage of a parity price. Unless there is such a formula in this bill 
I am sure it will be of little value to the Canadian agricultural producer. It will be of no more value than the floor prices which the minister and the government have set from time to time within the last few years. In almost every instance the floor price has been below the cost of production.
What I have said about the commodity credit corporation is not the whole picture. Not only does that organization guarantee the farmer a high percentage of parity; it has the right to grant large loans on surplus agricultural products. According to this publication, in 1950 the commodity credit corporation made loans of over $65 million on something over 33J million bushels of wheat. In other words, in the United States there is an organization which is prepared to lend substantial sums of money to farmers at low interest rates on surplus wheat. The minister should make this bill a measure which will help the hard-pressed wheat producers of the prairie provinces.
This measure should be similar to the United States legislation so that the government will meet the requests of farm organizations and provincial governments that an advance payment of 75 per cent of the initial price be made on farm-stored grain. The Minister of Agriculture (Mr. Gardiner) could administer an organization which would advance money on farm-stored grain because he has in his department a large staff which could be used to see that the granaries were properly constructed and the grain in good condition. I refer to the prairie farm assistance inspectors located throughout the three western provinces.
The government must meet this agricultural marketing situation in western Canada. It is not only the farmers who have been unable to market their grain who are suffering; the whole economy of Saskatchewan is threatened.


Robert Fair: Of the west.


Hazen Robert Argue: As my hon. friend in the Social Credit group reminds me, the economy of the west is threatened, because I understand Alberta is in as bad shape in that respect as Saskatchewan. Our storekeepers have thousands upon thousands of dollars on their books. The storekeepers in the small towns throughout the west are probably granting more credit than all the banks in the three prairie provinces. Unless the farmers are given an advance on farm-stored grain the small town merchant will be in dire peril, the farmer and his family will suffer, and the whole western economy will be in danger.
I should like the minister to discuss with his colleagues in the cabinet the possibility

of doing something in this measure to provide for the advance of at least 75 per cent of the initial price on farm-stored grain. The Prime Minister (Mr. St. Laurent) has informed us at various times in the recent past that the government was considering this problem, that it had not closed the door to action, that it had not made a final decision. I ask the Minister of Agriculture to see that the decision is made now to advance 75 per cent of the initial price on farm-stored grain, the money to be advanced by the government through an organization similar to the one now being established.
We in this group are glad to see the agricultural products board placed on a permanent basis, but once again we plead with the minister and the government to place in the legislation a parity formula which will guarantee to the farmer his costs of production and a reasonable standard of living in keeping with our Canadian way of life.


Mr. A. Earl Caiherwood (Haldimand):: I just want to say a brief word on this resolution, Mr. Speaker. Your Honour has been lenient in giving the hon. members considerable latitude in the discussion of these agricultural matters. However, as the hon. member for Melfort (Mr. Wright) has pointed out, this is the only opportunity that we have of bringing some of these agricultural problems to the attention of the minister and the house. The hon. member for Brant-Wentworth (Mr. Charlton) has placed the position of the dairy farmer and the dairy industry clearly before the house. In conjunction with that, I should like to put on the record the wording of one of these cards which so many of us have received, because I believe it is important. It reads:
Dear Sir:
As a dairy farmer I am taking this opportunity to protest against the unfair competition created in the dairy industry by the importation of low-priced vegetable oils. My investment in dairy livestock, buildings and equipment is tremendous and is increasing every year. The condition created by the importation and rapidly expanding uses of low-priced vegetable oils in imitation dairy products is endangering my investment. I urgently request the government of Canada to take immediate action to give the Canadian dairy industry adequate and effective protection against the importation of low-priced vegetable oils which is undermining the security, stability and future of my farm business.
I think that clearly and effectively expresses the position of the dairy farmer. I am entirely in accord with the wording of that card.
I should like also to read a quotation from the Globe and Mail of November 12 concerning the food and agriculture organization meeting which is to be held in Rome. I feel that some of our urban friends do not realize the seriousness of the food situation,
Agricultural Products Board so it is up to the farmer members of the house to bring these matters to the attention of the people. I am very happy to learn that the minister and a delegation from his department will attend this food and agriculture organization meeting in Rome. The article reads:
The Food and Agricultural Organization of the UN reported today that three-fifths of the world has insufficient nutrition and food supplies per person have dropped 4 per cent below pre-war level.
This summary of world food situation was placed before the 18-nation guiding council of FAO at its opening session. The council put the report onto the agenda of the sixth world conference of the 66 members here for November 19 to December 7. The food report said:
"Aggregate production of principal food crops in all countries was 9 per cent above pre-war. However, since 1936 the world population has increased by 13 per cent. Therefore supplies per capita in 1950-51 were still 4 per cent below pre-war levels which were themselves insufficient.
Nutritional levels were still very far from satisfactory in vast regions of the world, such as the far east, near east and Africa, containing three-fifths of the world's peoples . . .
While total food output in 1951-52 is expected to expand, the prospect for supplies in many deficit areas shows no improvement."
So, that is the world situation. I feel that everything that can be done for the promotion and advancement of agriculture should receive our hearty support. I am not going to oppose the resolution at this stage. I welcome the opportunity of seeing what the minister is presenting to us in the bill which will follow this resolution. I do hope it will implement some of the recommendations the dairy farmers have made on these cards.
Motion agreed to and the house went into committee, Mr. Dion in the chair.


John Alpheus Charlton: How many pounds of butter have been imported into the country this last year?


James Garfield Gardiner: Up to the present the imports are approximately 7 million pounds imported by the board with which we are now dealing, and another 3 million or 4 million pounds imported by private concerns.


John Alpheus Charlton: Is the minister still permitting these private firms to import butter?


James Garfield Gardiner: No; there has been no butter imported by private firms since the government order was put out on August 4. The butter which private concerns were allowed to import was purchased before the government order was issued. The order stated no butter would be allowed entry unless we were notified before August 15 that it had been purchased before August 1, 1951.


Percy Ellis Wright: Has the minister any figures to show what this butter imported by the private trade cost? Will he also answer the
98$

Agricultural Products Board question I asked when I was speaking before supper with regard to the method the government uses in grading imported butter for the domestic trade?


James Garfield Gardiner: The arrangement which the government made with countries such as The Netherlands and Sweden was that the butter was to be made in accordance with our specifications. Butter which is produced in countries like Denmark, Sweden and The Netherlands is not produced by the same method as we use to produce butter, the reason being largely that the butter which is produced in European countries can be sold within a short period of time, at the outside within a few weeks. Much of our butter is produced in the summer months to be consumed in the winter months. Based on these facts our method of production is somewhat different from theirs. That was the reason why, when we purchased butter three years ago, there was considerable difficulty experienced in getting rid of it. We purchased the butter these countries produced for their own consumption and it did not keep too well. Our people did not like the flavour of it. On this occasion we insisted on the butter being produced in accordance with our methods, and they have guaranteed to produce it that way. Then, it is graded on much the same basis as our own.
This afternoon the hon. member for Melfort (Mr. Wright) said he would like to know how this butter is being dealt with after it arrives. The basis on which it has been dealt with is this. We say to the Canadian dealer: We are prepared to trade you butter which we have obtained from a European country for butter which was produced in Canada. The butter which was produced in the European country is put on the market almost immediately by the Canadian concern which obtains it, and the government holds the Canadian butter for consumption later in the winter season. Even after having had the butter made according to our standards, we have that safeguard of having Canadian butter to carry over the long winter period rather than butter which was imported from the European countries.


Percy Ellis Wright: The grade that actually goes on the domestic market is not the same as the grade which is required of the Canadian producer when he markets his?


James Garfield Gardiner: The butter is graded on the same basis, and goes on the market on the same basis.


Robert Fair: I wonder if the government has yet given any consideration to building up a formula for the setting of parity prices


when the agricultural prices support board undertakes to buy butter? I believe the Canadian Federation of Agriculture has offered to give every assistance and co-operation in working out such a formula.


James Garfield Gardiner: Mr. Chairman, on one or two occasions while the hon. member for Assini-boia was speaking I was tempted to suggest to him that he was talking about quite a different bill from the one which is before the committee at the present time.


Hazen Robert Argue: I had not seen it.


James Garfield Gardiner: He was really speaking with regard to the Agricultural Prices Support Act, which is a permanent act now. A number of members have suggested that on a previous occasion they had said that this particular type of board should be set up and that it should be made a permanent board. It was not this particular board at all, or this kind of board that was being discussed on those occasions. It was the agricultural prices support board; and it is the agricultural prices support board which establishes any relationship as between some basic period and the present period for prices in connection with farm products.
Just a few moments ago it was stated that there was in existence in the United States a system which was much better than ours. That is a question which has been discussed over the years and it is remarkable that when we get in touch with some of those who are authorities on the system in the United States, we find that they are inclined to state that our system in many respects at least is superior to theirs. As a matter of fact, they sometimes indicate that if they had it to do all over again they would probably deal with the question in much the same way as we have dealt with it. In order to indicate to the hon. member for Assiniboia that the price level in the United States is not as he thinks it is, I would call his attention to the fact that the price of hogs-which has been discussed a great deal in connection with this bill and was also discussed yesterday in the debate on the speech from the throne-was as follows. I do not know that I should read all these figures. Perhaps the house would like to have them put on the record, because they tell a story.
In January of this year the price in Canada for the week of January 6 was $2.83 a hundred higher in Toronto than in Chicago; the next week the price was $2.66 higher; the next week it was $2.40 higher; the next week it was $2.97 higher; and the next week $2.64 higher. From there on I will read only the occasional figures. The last week in February the price was $3.54 higher in Canada. In the first week of March it

was $4.36 higher and in the last week in March it was $3.91 higher. In the first week of April it was $4.21 higher in Toronto, and in the last week of April it was $2.18 higher. In the first week of May it was $4.04 higher and it was $5.24 higher in the last week of May. In the first week of June it was $5.20 higher and in the last week of June it was $6.06 higher. In July, the first week, it was $6.22 higher; the next week it was $7.15 higher; the next week it was $6.99 higher; and the next week it was $5.52 higher. Then coming down to August it began to go down; it was $3.98 higher in Canada the first week and $4.67 higher in the last week of August. Then the last week in September it is down to $2.02 higher; and during October it was $1.18, $1.29, $1.58 and $2.59 higher. Now, in November, for the first week it was $2.89 higher on the Toronto market and $3.51 higher on the Toronto market for the second week of November.
That is why I asked the hon. member for Selkirk yesterday, when he was speaking, why he started in July instead of starting in March. In other words, the matter of when a farmer is going to sell his hogs is entirely in the farmer's own hands, apart from the fact that his thinking is regulated by the weather. A farmer can have hogs coming in in July if he so wishes, or he can have them come in in March if he so wishes. That is, he can have them come on the market at that time, depending on when he breeds his sows and the period over which he feeds his hogs. But as far as I am concerned personally-I am not speaking for any other farmer, but I find that many of them do the same kindi of thinking as I myself do-it costs me too much to have hogs coming in in July, to have them bred at a time when they will be littered when it is thirty degrees below zero in the country that I live in. In other words, I do not have pigs come in at that time because, in the first place, I will lose half of them; and, in the second place, it costs me far more to feed them in the winter months than it does in the summer months. I therefore have my sows come in in the latter part of March or the early part of April and not later than May. That means that I do not have any hogs to sell in June, July or August, or very few. However, I breed the odd sow so that I will have a little bit of money coming in during that period. But most of my hogs are sold at the period when I can produce them at least cost. So the persons who sold their hogs in July obtained as much as $7.15 higher for hogs sold in July than they would have obtained had they sold them in Chicago at the same time. Then in the latter part of the season when we deliver our hogs in great
Agricultural Products Board numbers we got only $1.18 higher and in the early part of the season we got $2.40 higher in January. But all the time, every week of the year, we got more for our hogs in Toronto than producers got for hogs on the Chicago market.


Percy Ellis Wright: Mr. Chairman-


Hazen Robert Argue: Mr. Chairman-


James Garfield Gardiner: Both of my hon. friends who are on their feet had quite a bit of time without my interrupting, and what I should like to say is that in these figures there is not anything which indicates that the United States farmer has a better deal on hogs than we have in Canada. The fact of the matter is that hogs have been selling higher in Canada all during the year; that is true not only of this year but of other years. They have been selling higher in Canada than they have been selling in the United States. When somebody suggested the other day that farmers ship hogs out of Manitoba down to Minneapolis, and that they are turned into pork and shipped back to Winnipeg, may I say that I can hardly imagine a farmer in Canada anywhere shipping many hogs down to the United States during any time in the last year. As a matter of fact, few have been shipped to the United States, and then only in cases where it is done for reasons other than that of supplying pork.
So much for hogs.


Percy Ellis Wright: While the minister is on the subject of hogs, I should like to ask him a question. He was quoting the price of hogs, especially No. 1 hogs in the United States and grade B in Canada. I draw his attention to the fact that the grade B hog in Canada is not comparable with the No. 1 hog in the United States. It is much closer to compare our heavies with grade 1 in the United States, because they market a heavy hog, and they are not the same quality as ours. It makes a difference of approximately $3. We find that these are marketing at about the same price.


James Garfield Gardiner: We took all that into consideration when we made this table.


Percy Ellis Wright: I do not think you have taken it into consideration.


James Garfield Gardiner: Maybe I had better put it in Hansard and then you can check it because this is what it actually says: "Column 4, choice barrows and gilts at Chicago 200 to 220 pounds". That is the same weight as our choice hogs. Then it gives dollars per hundredweight, live weight, and then it gives the B-l hog at Toronto, including premium dollars per hundredweight, live weight; then it gives the live weight price of both hogs at both markets, and the differences are as I

Agricultural Products Board have suggested. With the consent of the committee, I should like to put the whole table on Hansard and then it can be checked by hon. members.


Some hon. Members:: Agreed.


John Alpheus Charlton: Before he leaves hogs will the minister permit another question?


James Garfield Gardiner: Yes.


John Alpheus Charlton: Why is it that the fluctuation is so wide in Canada as compared with the fluctuation in the United States market? And also, why is it that the United States consumer can buy bacon in that country for 39 cents a pound?


James Garfield Gardiner: Well, I do not think I will try to answer the last question as to why it is that they are able to buy bacon at 39 cents a pound. In the first place, one would have to do some checking as to where they buy it at that price and a number of other things. But as to the other question, as to why the hogs vary in price today, I tried to explain that a moment ago. There are very few, or comparatively few hogs coming on this market in June, July and August. As a matter of fact, every packing house stores them in the early part of the season, frozen, in order to supply the market in June, July and August.


John Alpheus Charlton: He makes a killing.


James Garfield Gardiner: Perhaps he does not make a killing out of it; I do not know whether he does or not. But in any case, he does the sensible thing, in view of the fact that there
would not be enough pork to eat in these months if he did not do it. The hogs are bought in the early part of the year and put into cold storage and sold on the market during that period. But the farmer who has hogs to sell during that time gets those higher prices. The argument that has been used in this house by every hon. member who has spoken critically with regard to it is: Why do hogs go down as between July and September? They have done that every year since hogs were produced in Canada, and every farmer knows why they do. He knows it costs more to produce hogs to be delivered in July than it costs him to produce them to be delivered in any other month in the year, and therefore he does not produce them to be delivered in July excepting in a limited way. When we all make up our minds on that and start delivering great numbers in September, of course they are lower in September; but at no time in the year have they been below the floor which is set by the fact that Wiltshire sides could be sold at $32.50, which works out at Winnipeg to about $27 a hundred, and it works out at other markets on a little different level for dressed hogs. That price has prevailed, or the price of around $29 has prevailed during the greater part of the time.


Hazen Robert Argue: I am sorry if the minister had not finished.


James Garfield Gardiner: I have finished answering that question. If there is another question I will answer it. The table I referred to reads as follows:

Agricultural Products Board
HOG PRICES CHICAGO, TORONTO and WINNIPEG-1951-WEEKLY
Economics Division
Column 1	Column 2	Column 3	Column 4	Column 5	Column 5 minus Column 41951	B-l Hogs	B-l Hogs	B-l Hogs	Choice	B-l Hogs	at Toronto	at Toronto	at Winnipeg	Barrows and	at Toronto	DifferenceWeek Ended	excluding	excluding	including	Gilts at	including	Torontopremium	premium	premium	Chicago	premium	live inclu.dollars	dollars	dollars	200-220 lbs.	dollars	premiumper cwt. of	per cwt.	per cwt.	dollars per	per cwt.	less Chicagocarcass	live weight	live weight	cwt. live wt.	live weight	S cts.	$ cts.	$ cts.	S cts.	$ cts.	$ cts.January 6	31 10	23 32	22 88	20 99	23 82	2 8313	31 10	23 32	23 09	21 16	23 82	2 6620	31 10	23 32	23 31	21 42	23 82	2 4027	32 10	24 08	23 75	21 60	24 57	2 97February 3	32 97	24 73	24 32	22 59	25 23	2 6410	33 60	25 20	25 00	22 95	25 70	2 7517	35 10	26 32	25 31	23 78	26 82	3 0424	35 10	26 32	25 69	23 28	26 82	3 54March 3	34 60	25 95	25 69	22 09	26 45	4 3610	34 22	25 66	25 69	22 24	26 16	3 9217	34 35	25 76	25 56	22 26	26 26	4 0024	34 60	25 95	25 44	22 02	26 45	4 4331	33 85	25 39	24 50	21 98	25 89	3 91April 7	33 60	25 20	24 00	21 49	25 70	4 2114	30 98	23 24	23 18	21 38	23 73	2 3521	29 60	22 20	21 81	21 34	22 70	1 3628	31 60	23 70	21 84	22 02	24 20	2 18May 5	33 60	25 20	22 43	21 66	25 70	4 0412	35 10	26 32	23 56	21 50	26 82	5 3219	33 10	24 82	24 19	21 52	25 32	3 8026	35 10	26 32	24 44	21 58	26 82	5 24June 2	35 35	26 51	24 81	21 81	27 01	5 209	36 60	27 45	26 56	21 80	27 95	6 1516	37 85	28 39	27 31	22 51	28 89	6 3823	38 60	28 95	27 56	23 47	29 45	5 9830	38 35	28 76	27 56	23 20	29 26	6 06July 7	38 60	28 95	27 84	23 23	29 45	6 2214	39 60	29 70	28 69	23 05	30 20	7 1521	39 60	29 70	28 69	23 21	30 20	6 9928	37 60	28 20	28 69	23 18	28 70	5 52August 4	36 10	27 08	28 56	23 59	27 57	3 98ii	35 10	26 32	27 19	23 25	26 82	3 5718	35 35	26 51	27 19	22 98	27 01	4 0325	35 35	26 51	27 19	22 34	27 01	4 67September 1	35 85	26 89	27 19	21 45	27 39	5 948	35 85	26 89	27 19	20 98	27 39	6 4115	32 26	24 20	26 07	20 67	24 69	4 0222	28 60	21 45	22 07	20 88	21 95	1 0729	30 35	22 76	21 94	21 24	23 26	2 02October 6	30 27	22 70	22 07	22 02	23 20	1 1813	29 10	21 82	22 31	21 03	22 32	1 2920	29 10	21 82	22 41	20 74	22 32	1 5827	29 35	22 01	21 38	19 92	22 51	2 59November 3	29 35	22 01	21 19	19 62	22 51	2 8910	29 35	22 01	N.A.	19 00a	22 51	3 51
a approximation
N.A. not available

Agricultural Products Board


Hazen Robert Argue: The minister has advanced some reasons for such a large fluctuation in the price of hogs. Even though the minister might have advanced a good reason, which I think he has not, that still is no assistance to the farmer who is producing hogs. Fluctuations here are far too great for a stable hog industry. I think the minister gave one good reason why the fluctuation has been on when he stated that at no time did the price go down to the floor. In other words, the government's floor under bacon prices was so low that there was ample time for the packers to have a highly fluctuating price above that floor and skin the farmer in the process. If the government had increased the floor to something in the neighbourhood of the average price within that period to $32 or $34 a hundred, the agricultural products board could have obtained sufficient quantities of pork at the floor price and fed it back into the market in order to provide a stabilized price to the farmer and a fair price to the consumer. My contention is that one of the main reasons why there is such a large fluctuation in hog prices is the fact that the government's floor is so low that it does not play any part in the marketing of hogs.
The minister has quoted the United States market price in regard to hogs. It is perfectly true that the support price in the United States in relation to hogs is defective. That is one place where the United States market support price is defective. If the government will look over United States policy of floor prices on agricultural products taken as a whole they will see that every farmer has an opportunity to produce a number of main crops for which there is guaranteed a stable floor price based on parity. Therefore while it is perfectly true that the hog producer has not the same type of stability as other producers, nevertheless the stability program in the United States is so varied, so widespread that in my opinion every agricultural producer in the United States has a number of important stable crops for which there is an adequate floor price.
May I ask the minister a question about one part of my earlier remarks? Can the minister say whether it is his intention, or the government's intention to speak to the Prime Minister of the United Kingdom when he is in Canada, to have a thorough and frank discussion on the possibility of an adequate market for agricultural products in the United Kingdom, to see whether some arrangement cannot be made which would


be mutually advantageous, assist the Canadian agricultural producer and help to increase the flow of Canadian agricultural products to the United Kingdom? Is it the government's intention to review Canadian agricultural policy in relation to British policy when Prime Minister Churchill is here?


James Garfield Gardiner: I would expect that if I were to suggest taking up Mr. Churchill's time when he is in Ottawa-in view of the remarks which were made here this afternoon by the Prime Minister-in asking him to discuss with me that question, he would be quite justified in referring me to Lord Woolton, who is the representative in the cabinet of the government of Great Britain who speaks with regard to agricultural and food matters. Therefore, having that in mind, I myself made an appointment with Lord Woolton to meet him when I am in London next week. I am going to discuss the matter with Lord Woolton, and let him discuss it with Mr. Churchill. I think he will have much more effect upon Mr. Churchill than I probably would.
One of the reasons why I prefer to discuss it with Lord Woolton is that during all the years of the war he and I had the privilege of being on the combined food board. During that period, too, I had the privilege of arranging for very large quantities of Canadian food to be sent to Great Britain. We did send as much one year as 700 million pounds of bacon, and right now we are not sending any. Of course I am going to discuss that with Lord Woolton, and many other things that we used to discuss together in those years, and I am quite sure that we can start where we left off before and arrive at some conclusions in our discussions. Therefore, I prefer to discuss it with Lord Woolton rather than with Mr. Churchill, although if I get an opportunity of saying anything to Mr. Churchill about it when he is here I will add something to what has been said on the other occasion.
I do want to go a little further in connection with the matter which has been raised, as it is related to dairy products. We have been asked why we do not establish a formula and work to a formula. Our act provides that we should retain the proper relationship between the prices of farm products as they were in the last three years of the war, and the prices in the year with which we are dealing-that	is, the current year-as
compared with the relationship existing with farmers' costs.
I have before me the record with regard to the operations of farmers in general in producing and selling for the two different

periods to which reference was made by hon. members on the other side of the house this afternoon. It is stated here, for example, that the price of fluid milk from 1935 to 1939 was $1.45. In August 1951 it was $3.99. They take the figure 100 for 1935-39. That would give an index figure of 275 for 1951.
Then, if you take the figures for butter, we find that on the same basis the figure of 100 in 1935 to 1939 would give 259 in 1951. And on cheese, the figure 100 for 1935-39 would give 296 in 1951.
When it comes to goods and services used by farmers, exclusive of living costs-and if living costs were included it would give a wider margin-and taking 100 for the period 1935-39, we get an index of 236-4 in 1951. It would be noted that the index is higher on each of the dairy products than it is on the commodities purchased by the farmer, both with regard to the services he buys and the products he buys.
But that is not the basis upon which we work. The basis we take is not 1929-35 or the 1935-39 base, which was argued against here all afternoon. The basis we take under the floor prices legislation is 1943-45. Then, when we take the price of milk in those years as $2.45 and $3.99 for 1951, the index figure of 100 for the period 1943-45 gives an index of 163 for 1951.
Then, coming to butter the figures are 100 and 152. That is the low one. And when some say that butter is one of the lowest priced foods in Canada today, they are perfectly right. Taking 100 as the basis for 1943-45, the index for butter is 152. Taking the same index of 100 for 1943-45 in respect of cheese, we see that it is 173 in 1951.
Then, with respect to goods and services used by farmers, including living costs, taking an index of 100 for the period 1943-45 we find a figure of 160 for August of 1951. In other words, that figure is lower than the index figures for either cheese or milk, and a little higher than the figure for butter. But if you average the three you will find that it is just about exactly what we have undertaken to do, namely a maintenance of the relationship to about the same point in the years as we go along as it was in the last three years of the war.
Then, just to complete what I have to say with regard to dairying, before sitting down I should like to say that for five years before the war milk production in Canada averaged around fifteen and a half billion pounds. Someone said this afternoon-I think it was the hon. member for Brandon-that milk production had been decreased over the last five years by approximately one billion
Agricultural Products Board pounds a year, making the computation on a complete year. That was a billion pounds, it was pointed out, lower than it was six years ago.
Well, that is perfectly right. But here are the facts based on the statistics. For five years before the war milk production in Canada averaged about fifteen and a half billion pounds. For the five years during the war it averaged about seventeen and a half billion pounds. For the first five years after the war it has averaged about sixteen and a half billion pounds. In short, it went up two billion pounds during the war and went down one billion pounds since the war, which means that it is one billion pounds a year higher since the war than it was before the war.
All hon. members realize that one cannot base conclusions upon figures obtained during war years. There are always circumstances surrounding production-or, indeed, anything else that happens during a wartime period- which make it impossible to draw reasonable comparisons based upon those figures.
For example we told every farmer in Canada what he was to do during the war. We told those farmers, "You cannot deliver milk to a canning factory; you must deliver it to a cheese factory." In other cases we said, "You must deliver it to creameries"-where butter was produced. But during peacetime we are not able to say that-and perhaps we would not wish to say it even if we were able to do so. At least the provinces, which now have the authority, do not say it. That authority does not rest with this government, but rather with the provinces. I do not hear very many of those who belong to the parties conducting governments in those provinces making the statement that provincial governments ought to do it. Because, after all, they are the only authorities who can do it, if it must be done.
The extra billion pounds of milk is being consumed as fluid milk. Butter production averages about the same in the five years since the war as in the five years before. In other words, about the same amount of milk goes into its production. The amount of milk used in the production of cheese is down, and the amount used to produce powdered or canned milk and ice cream has increased by a similar amount. In short, the only change has been that the farmer finds it to his advantage to turn his milk into other uses, rather than into cheese.
The average number of cows being milked in Canada during the first five years before the war was 3,780,000. The average number milked in Canada during the war was 3,736,000. The average number of cows being

Agricultural Products Board milked in Canada now, five years after the war, is 3,667,000. The number milked in 1950 was 3,609,000. The reduction is not great, and could be brought up very quickly if conditions were to change to warrant it.
It is interesting to note that during the five years preceding the war the top grade of butter averaged 24-8 cents a pound, and the top grade of cheese, at Montreal, averaged 12-9 cents. In the first three years of the war the average prices of those two commodities were 34-9 and 21-2 respectively. They are now 63 to 64 cents for butter and 32 to 36 for cheese. In other words, it would not appear that the only matter to which the farmer is giving consideration, when he decides he is going to produce, is the price that he will obtain or even the relationship between the price he obtains and the price he has to pay for the articles he must buy or for the service he must have.
I believe it was the hon. member for Brant-Wentworth this afternoon who hit the nail on the head when he quoted the reasons given by the past president of the dairy council as to why farmers do not produce more. I think he gave the real reasons. They were read to the house this afternoon. This same question was raised as to whether he meant exactly what he said. He said that he thought the real reason why farmers were not producing more milk and not milking more cows was because they could get more money for doing something else. In addition, he went on to suggest that they got it doing something which they did not find quite so binding upon their time and which did not require them to do things which they were not so much in favour of doing but would have to do in order to get money out of the production of milk. I think that has some bearing on it, and I think everyone agrees that it has some bearing.
We are able to make money at present out of doing things which at other times we were not able to make money doing. Therefore we take that choice rather than producing these products. But when one puts all the facts together one must conclude that the dairy farmer is obtaining more for his products than ever before. It will be said at once that his costs are higher. The question is as to which has increased the greater amount, and I have already put the figures on the record with regard to that matter.
There is only one other argument that has been produced here today, and which is advanced continuously, with which I should like to deal. It is an argument, used quite frequently, which in my opinion is not sound. It is stated over and over that the constant sale of heifers and cows to the


United States and cows to the butcher suggests that farmers are quitting dairy farming. There are cases where that is true but an examination of the statistics will indicate that the dairy farmer is really taking advantage of another source of revenue. There are not so many calves being vealed. Calves are being retained to milking age and placed in stalls vacated by cows which have been sold either for butchering or for milking elsewhere. Some of the milk cows are being sold to the United States and heifers take their place in Canada.
A better price can be obtained for aged cows as canners and cutters than ever before. Members of this house will recall that in 1938, the year before the war, this government paid farmers in the drought area $2.25 a hundred for canner and cutter cows, and right now you would probably get 20 cents a pound for the same type of cow. Farmers are now selling cows for canners that in earlier days they would probably have kept milking. In short, in addition to a better price for dairy products Canadian dairy farmers have the best market for breeding stock for export to the United States and South America which they have ever experienced. How any member can get up in the house and argue that is not a good thing for the farmer I cannot understand. The farmers of this country are not only raising herds for the purpose of producing milk, butter and cheese. They are raising dairy herds because they have some of the best breeding stock in the world from which to produce dairy stock.
Last year or the year before, when I was at the royal winter fair in Toronto, I had the privilege of having my picture taken with a bull. I was very much honoured in having my picture taken with that bull. He was sold to a buyer in South America for $15,000. When a farmer in this country can sell a bull for $15,000 to anybody I think he is doing a good job for himself and a good job for his country. I do not think there is any ground for criticism in that. Of course these farmers are not milking quite as many cows as they were but I venture to say they are getting as much milk from the number of cows they are milking. As a matter of fact the statistics already quoted show that they are getting as much milk from the cows they are milking now as they got from whatever number of cows they were milking prior to the war. I think farmers generally are doing pretty much what I do myself. I do not keep dairy cattle because I do not like milking either, and some other people do not like milking. But I keep cattle, and they are beef cattle. As long as I had grade cattle

during and after the war I did not have an animal on the farm that had had more than two calves. Why? Because I think the price is going to go down some time and I do not take any chances of having any cows around that have had more than two calves, if they are of the grade variety. I have nothing but purebred Shorthorns now, and I even do not let those get beyond the age of 7 or 8. I can market them at a higher price now for beef than I was able to market them a few years ago as breeding stock. Therefore when they reach an age where they are likely to go back instead of going ahead we sell them, and surely no one is going to criticize farmers for doing that. That is good business, and if it results in our having a few less cows milking for .the time being it will not take very long to pull up the few thousands indicated in the figures I gave a few moments ago. The farmers could pull that up in six months easily and be back on the same level as they were before.
But they will not do that until such time as prices are lower for beef and breeding stock than they are at the present time. I am not going to do anything as Minister of Agriculture either to lower the price of beef cattle or to lower the price of the dairy cows that they have for sale. I do not think it is up to me to do anything about that. It took me ten years of steady working after I came here, with all the co-operation I could get from anybody, to get the prices up from the low levels of the thirties to where they were by the time we got through with the war. Now that the war is over we have spent the last five years getting prices higher, by every policy we have followed, than they were even during the war. I do not know why anyone representing an agricultural constituency would criticize that. If that is called poor business for the farmers carried on by the government of this country, then I am very pleased to be associated with those who have been carrying on that kind of business.


Mr. Ferguson:: Have your picture taken without the bull next time.


James Garfield Gardiner: Anything that raises prices to the farmer from time to time above the level of the period prior to the war is, I think, doing a good service for this country.
I did not get my hon. friend's question.


Julian Harcourt Ferguson: I suggested that you have your picture taken without the bull next time.


Percy Ellis Wright: The minister has said that he had his picture taken with an animal that sold for $15,000 but I think he has made more than that peddling his line. The point that 94689-63
Agricultural Products Board I rose to make is that the minister stated our production was fairly satisfactory and that we still had a good number of milk cows in the country. I have here a statement made by the party whom the minister quoted a short time ago, and it gives the real reason for the decrease in production. He says that the number of milk cows on Canadian farms as of June 1, 1951, reached the lowest point in twenty years, and this in face of the fact of a human population increase of two and one-third million. The minister has quoted figures indicating that we are pretty well holding our own.


James Garfield Gardiner: I have the figures here if you want me to read them to you. I can prove that that statement is not quite correct.


Percy Ellis Wright: We are doing better than
holding our own so far as population is concerned but we are not doing enough in producing essential foods for that population. The production of milk has declined well over a billion pounds since the end of the war. The minister has talked for quite a while but he has not given us one thing that the government is going to do to increase the prices of dairy products to the point where farmers will believe they are getting a fair deal and will increase their production. I would like him to give us details of the policies the government are going to follow which will tend to increase production. No one wants prices to come down. Some hon. members are looking over here as though we on this side were advocating a policy which would decrease prices. We never advocated any such policy. What we ask for is a reasonable floor price under these products which will give the farmers some assurance of future markets, some assurance that they can go ahead and increase production. I would like the minister to tell us something with respect to government policy to increase production in this country.
I should like to ask a question with regard to the resolution we are now discussing. The resolution refers to a payment not to be greater than the amount by which $15 million exceeds the balance of the agricultural products board account. I suppose that anything over that amount will be paid into the consolidated revenue fund. Is this amount expendable or is it just working capital for the board?


James Garfield Gardiner: I take it that to start off
with the board will draw not more than $15 million. We can purchase whatever we are required to purchase, but having purchased a commodity we sell it. As we obtain money for it that goes back into the account. The balance over and above the amount which is being carried cannot be more than
994	HOUSE OF
Agricultural Products Board $15 million. In other words, we will never have more than $15 million of working capital. It is a circulating fund which may amount to much more than that for the time being in view of the fact that we may have products moving from one side to another.


Percy Ellis Wright: If losses are sustained will
they be taken out of the $200 million under the Agricultural Prices Support Act?


James Garfield Gardiner: The Agricultural Prices
Support Act does not affect this at all except that this board may be asked to buy products for the agricultural prices support board. When that is done the money for that purpose will be provided by the agricultural prices support board.


Percy Ellis Wright: What is the necessity for two
boards? Cannot the agricultural prices support board do what you are asking this board to do? It seems to me there is duplication in setting up the two boards.


James Garfield Gardiner: The agricultural prices support board has a big enough job providing me with the statistics which I have been quoting to satisfy my hon. friends on the opposition side without entering into the purchasing and selling of livestock. They would ask this board or some other agency to do that particular work for them.


Percy Ellis Wright: Were they not doing that
purchasing up until now?


James Garfield Gardiner: No.


Percy Ellis Wright: Who purchased the apples and potatoes?


James Garfield Gardiner: The meat board purchased the livestock that was purchased from time to time to supply the British contracts or for other purposes. The dairy board purchased cheese or other dairy products that were required. The special products board purchased potatoes, apples, beans or other products of that kind. There were three boards. This bill is amalgamating the three into one, and taking persons who are familiar with all these activities to create a board of seven instead of the smaller boards which we had before. This board will purchase whatever it is ordered to purchase by the government or by me on behalf of the government.


Jean-François Pouliot: I think it would be timely to recall Mr. Bennett's policy to increase the price of butter. As a foreword may I say that one of his supporters, the Conservative member for Regina, thanked Mr. Bennett when he was prime minister for having subscribed $700,000 to the party fund. The story behind that is that both Mr. Bennett and


his chief organizer invested $350,000 each in the stock market and speculated on the fall of prices. Each time Mr. Bennett said that things were going badly in Canada he was making more money for the party fund. When both had got back the money they had invested in the stock market Mr. Bennett delivered a sermon advising the young people not to speculate on the fall of prices. He withdrew his money and gave it to the party and used part of it to import butter from New Zealand to be dumped on the Canadian market in order to lower the price of Canadian butter.
I heard butter, butter, butter during the election, and I was fed up with it. After the election, which I survived, my great pleasure was to ask questions of the then minister of agriculture, Hon. Mr. Weir, who represented the constituency of Melfort which my hon. friend represents now with such distinction.
There was a by-election in the Three Rivers riding in the summer of 1931, a year after the election. I was supporting the Liberal candidate, a gentleman who is no longer a member of this house. We held a joint discussion with two lawyers from Montreal, a father and son, both very fine fellows.
I told them that they must speak about butter. We were speaking in a parish which supported an industrious dairying industry. Most of the voters were farmers who were interested in learning about the benefits they were receiving under Mr. Bennett's policy. Mark you, this is history. I said, "We will talk of agriculture; we will talk about butter. Here is one question in Hansard about butter. Can you answer it? Here is another one about butter imports; here is one about butter production; here is one about butter consumption; here is one about butter exports. What have you to say?" They said, "Bennett is a great man", and they won.
What were those questions? There were many but I have had a few copied. The first dealt with butter imports and will be found reported on page 2366 of Hansard of June 8, 1931. I quote;


Mr. Pouliot:: 1.	What firms and persons imported butter from (a) New Zealand, and (b) Australia in May, June and July, 1930?
2.	What quantity was imported by each firm or person?


Mr. Bennett:: It is not customary to give
the names of firms who import goods into this country. This has never been done; it has always been held as something that should not be done inasmuch as it is private business. In making this answer, I am but following the practice which has heretofore obtained in all departments.


Jean-François Pouliot: I am always satisfied with the
answers of the right hon. gentleman, provided he says something.
Question dropped.

On May 28, 1931, as reported on pages 2067 and 2068 of Hansard, I quoted the prevailing price for No. 1 pasteurized creamery butter as being 21 cents to 21J cents per pound. Then followed a lengthy discussion and everyone was asking the minister if butter had reached rock bottom-rock bottom for solid butter- and he could not tell. Then on May 29, 1931, as reported on page 2091 of Hansard, in answer to a question by myself, the then minister of agriculture stated that 750,000 pounds of Australian butter had been released at 32 cents. It is interesting to note that, in the first place, the Bennett organization brought in huge quantities of butter from outside to dump on the home market in order to cause the price to fall, and to complain that on account of Liberal policies the price of butter had fallen by a few cents from 39 cents. Then, after the harm was done, Mr. Bennett and his intelligentsia tried to improve conditions by raising the tariff very high.
In sessional paper No. 318, dated June 8, 1931, the government gave the following information, that under the general tariff rate applicable to butter, and established by Mr. Bennett, 14 cents per pound was the highest tariff. I remember that during the election he told the farmers, "You make no money on your butter. I shall help you by imposing a high tariff on butter which will be your salvation. I am the man who will do it". He did it, and what was the result? Butter reached the lowest price in forty years. With the highest tariff the price of butter fell to rock bottom. The sessional paper to which I have referred stated also that during the last 10 years-that is previous to 1931-and the last 20 years, 18 J to 18f cents was the lowest price at which butter sold since May 1904, when the price fell to 14J cents.
This illustration will serve to explain the situation to the farmers who sent the postcards asking for a high tariff on vegetable oils. There are some people who may have good intentions who would tell the farmer that the price of butter will be higher if there is a high tariff on vegetable oils. The same story may repeat itself, and it is a very dangerous proposition. I prefer the policies of the present Minister of Agriculture to those of any minister of agriculture under Mr. Bennett. But their policies were fallacious. Consider this, that with the highest tariff, 14 cents, the price of butter was only approximately 18 cents, while now without such a high tariff and with the assistance of the Department of Agriculture the price of butter is four times greater. This must be a good
94699-63*
Agricultural Products Board thing for the farmers. Everyone has not the means, especially those who have large families, to pay the high price for butter. They may use a substitute like peanut butter or margarine, especially in the cities, if those products sell at a lower figure. Does this create any difficulty for the farmer? Not at all, because the home production of butter is sold at a reasonable price, thanks to the intelligent policies of the Minister of Agriculture.
I continued to ask questions, and on July 28, 1931, page 4248 of Hansard, I asked:
Why did the price of butter drop from 40 cents a pound last year to 20 cents per pound this year, while the price of milk has remained at the same level for the past 5 years?


Hon. Robert Weir (Minister of Agriculture):: The only reason that can be given is that we are on an export basis with regard to butter and not with regard to whole milk.
That was right. On May 26, 1931, I asked the following question as recorded at page 2006 of Hansard:
If the production of butter is less than the consumption, is it necessary to import butter from outsicte?


William Gilbert Weir: Yes.
He was the minister of agriculture.
In any discussion of the problems of the dairy business from the point of view of the consumer as well as the producer, we must take into consideration the wisdom of the Minister of Agriculture and of his aides in carrying out a policy which is satisfactory to the country at large. Here we have a picture of the Conservative policy of olden days, and the practical policy of this government with regard to agriculture.


James Garfield Gardiner: When we went into committee I was asked a question by the hon. member for Brant-Wentworth and I told him I did not have the figures before me. I made a guess at them which was not very far away from the facts, but I think I ought to put the facts on the record. I was asked how much butter was being imported. Up to the month of September, we had imported 2,520,000 pounds. This year, on October 1, the stocks of butter were 62,069,000 pounds. There is still approximately 11,800,000 pounds of butter to be imported, made up of 8,600,000 on government account and 3,200,000 by private traders. Those are the complete figures up to October 13.


John Alpheus Charlton: Is that the total for the year?


James Garfield Gardiner: The total figures for the imports since we entered into the present arrangement. Of course, there were some imports earlier in the year under the old
996	HOUSE OF
Agricultural Products Board year. I am speaking of the dairy year which starts on May 1. These were purchases made during the dairy year.


Mr. Quelch:: I want to make sure I have a correct understanding of the minister's formula for setting floor prices or support prices. Did I understand the minister to say this support price is based on parity in the years 1943-1945 or is it based on a percentage of parity of those years? If that is the case, how low does the price have to fall below that before the government can say that it is enough to set the floor price or support price ? Is it the minute the prices of products in this country fall below that parity?


James Garfield Gardiner: To answer the last question first, the government acts in advance. For example, for two years we set the floor price on butter at 58 cents for two years. We expected that 58 cent floor price would retain butter at a level which would bring about the proper relationship between what the farmer was selling and what he was buying; and apparently we have not missed the mark by much.


Victor Quelch: Is that on parity with 1943-45?


James Garfield Gardiner: I will speak of that in a moment. Then in connection with eggs, some criticism has been made of the fact that we only agreed to buy eggs at 38 cents. We agreed to buy butter every day at 58 cents. That offer is there all the time. If no one else will pay more than 58 cents, we buy the butter. We did not get any butter at 58 cents this year. The butter was all sold above that price. We did not get any of it. We then raised the price later on, as has been stated, to 63 cents. But as was stated by various members, we are not getting any at present. The trade is paying just a little bit above 63 cents and is getting all the butter.
We have not raised any objection to that, and we do not raise any objection to it. We do not want to be in the butter business. We would much prefer that those who are in the business stay in it, and go on and do business; but we have tried to provide that they cannot bid the farmer down in the summer months, as they have in the past, at a time when the farmer is producing twice as much butter as the market will take-in, say, the month of May. It was the custom to run prices down, as has been suggested by the member for Temiscouata; at a certain period in the years gone by butter was 40 cents a pound one month and 20 cents a pound the next month. That was


because more butter was coming on the market than the market would take, and the price was forced down. We say we will take the butter any time at 58 cents. Then, when winter comes along, we add the cost of carrying it and put the butter back on the market at that price. We have had two years' experience with that procedure. One year we had a little bit of trouble because we got too much butter. The next year we had a little bit of trouble because we did not get quite enough. This year we do not know exactly what our position is going to be to the end. We have not got any. The trade, for reasons best known to themselves, have bought all the butter.
We have realized that there might be a shortage towards the spring and we have bought some butter from outside, in order that we might be able to handle the situation in, say, the month of March. We do not expect to have to handle it until that time. But we have some butter to carry over into that period in order to take care of the situation which may arise toward the end of the season. That has been the practice in connection with butter.
As to eggs, as I say, we only agreed to buy at 38 cents whatever eggs are left on December 1. We did not agree to buy eggs any other time. We say that on December 1 we will buy whatever eggs are in storage that anybody wants to sell us at 38 cents. Last year nobody wanted to sell us eggs at 38 cents and we did not get any. We were asked to go on with the same policy, and we did so. Eggs have sold on an average of about 16 cents a dozen more this year, throughout the whole year, than they did last year; that is, to the producer. They have sold about 16 cents higher, with the same guarantee that we will buy all the eggs that anybody wants to sell us at the end of the season. Last year we said that the end of the season was December 1. Now we have the same policy. Naturally we have not bought any eggs up to the present. We will not have to determine whether we are going to buy any until the end of this month. If we are required to buy a few, I am sure that everyone in this house will agree that any few that we may have to buy at the end of the month is worth while in view of the fact that eggs have been 16 cents a dozen higher in price to the producer this year than they were the year before. Hence that has not done any harm to the farmer. That is the method of dealing with eggs.
As to the other product that we have been dealing with in the past, namely cheese, we

came to the conclusion that it was not necessary for the government of Canada to be dealing in cheese any longer, partly because we did not have the authority under the act to do the things that we did before, but partly because almost altogether under our constitution the provinces have the opportunity of dealing with products and of saying what the price ought to be and what it will be. We therefore encouraged the farmers of Ontario to organize co-operatives. They organized a co-operative. We encouraged them to transfer their activities to Toronto instead of here. They transferred their activities there, and cheese is being handled this year in the province of Ontario by a co-operative board of farmers, or at least by a co-operative board operating for the producers.
The same kind of arrangement is not in operation in Quebec; but both provinces have been selling cheese to Great Britain direct; and I must say that they have received during this last summer the highest price for cheese that has ever been received from Britain at any time in the history of Canada's trading with Britain in cheese. They have had 32 cents a pound. But I must say at the same time that the amount sold was only some 22 million pounds, which is a low amount as compared with some of the sales previously. But that is not because the board would not have been prepared to sell more. It is because that is all there was to sell. They have sold all the cheese that was available to ship to Britain at that price.
In other words, we have been working along with those who are handling the different products and have been assisting as far as we can in the matter of stabilizing prices.
To answer the first question-do we seek to have parity prices?-may I say that I am going to be perfectly candid and say that no one who touches this matter-including myself-likes the word "parity", and we have never used it. We have stated in the act what we are doing. We have not stated it is parity. We have simply said that we are going to keep a record. We have a record of what the situation was in the last three years of the war. Every farm organization in Canada said that if they could maintain that position throughout time they would be perfectly satisfied. We said that we will retain that position or do everything we can to retain that position just as long as possible.


Victor Quelch: That would be parity with that period.
Agricultural Products Board


James Garfield Gardiner: You can call it parity or whatever you like. There are so many different definitions of parity that we do not use the word "parity". We have set up what to all intents and purposes is a formula upon which we work, and on that basis we have maintained a position where the price has been all the time upward. It is true that the price of everything that is being bought has also been all the time upward. But before we have set the floor price at all on anything, we have figured out what would likely maintain the level of the price the farmer was going to receive in relation to what we expected he was going to have to pay; and so far we have been fairly fortunate in figuring these matters out and in retaining price levels.


Victor Quelch: Then the intention is to maintain the floor price so that the price of agricultural products today will bear the same relation to the price of other products as the price of agricultural products in 1943 to 1945 bore to the price of other commodities.


James Garfield Gardiner: That is what we have been working for, yes.


Mr. MacKenzie:: There is one question I should like to ask the minister with regard to the importation of butter, whether it is done privately or whether it is done by the government. Is the duty always paid on butter that comes from the various countries? What is the duty, say, on butter from New Zealand or from Europe? As a result of paying that duty, and bringing the butter in here and selling it on the market, does it sell at a higher or lower price than the market price here?


James Garfield Gardiner: The duty on butter coming from New Zealand or Australia is 5 cents a pound. The duty on butter coming from any other country is 12 cents a pound. The old duty, down until a year ago, was 14 cents, as has just been stated to the committee. It was reduced 2 cents at the Geneva conference of three years ago, and so it is now 12 cents a pound.


Hugh Alexander MacKenzie: Is it always paid?


James Garfield Gardiner: It is always paid on the butter. For example, using the price which was paid for New Zealand butter, namely, 63 cents, it was 58 cents plus the duty. That is, the price of the butter was 58 cents, and the duty which they had to pay on the butter was 5 cents, making a total of 63 cents. In other words, that butter was bought at what was our floor price, 58 cents, plus the duty. Now, at about the time that that was done we agreed to buy butter from our own producers

Agricultural Products Board at 63 cents, which was the same price. Then we proceeded to check as to what we would have to pay for butter elsewhere and we found that we could buy butter from Sweden and from the Netherlands at within half a cent of what the British paid for that butter. One of the arrangements that we made with them was that they were to make the butter not to suit the British or even to suit their own consumers but to suit us. And we were able to purchase it, in so far as the price in their own country was concerned, at within half a cent more than the British paid for their accustomed type of butter. Then, the freight had to be paid on it to Montreal, and then there was a 12 cent duty to pay on it in addition to that. When that butter got here it was worth about 61 cents a pound. After having paid 12 cents duty on that butter it was still laid down here at 2 cents less than the New Zealand butter. That was our reason of course, and our only reason, for buying butter from the Netherlands and from Sweden. That butter is being put on the market here at the same price as Canadian butter. But that is owing to the fact that it has to be taken out of tubs, remixed, put into cartons and so on. When you get the cost all added there is not a great deal of difference between the price that the farmer is being paid and the amount that this butter costs.


James MacKerras Macdonnell: The minister said that the duty on butter was decreased 2 cents at the time of Geneva, and I understood him to say that it had been unchanged for a considerable time before that. Will the minister make that clear?


James Garfield Gardiner: I have just forgotten the exact rates on butter prior to 1930. The rates were quite low. For a period there was only 2 cents a pound, and I think even that was reduced if coming from New Zealand or Australia. It was during that period of time that we bought 40 million pounds of butter from New Zealand, which caused the difficulty that the hon. member for Temiscouata was speaking of a few minutes ago. Partly as a result of that, a new government came in, in 1930. They made the duty on butter coming into this country 14 cents a pound. The duty was prohibitive at that time, and in either 1931 or 1933 the New Zealand and the Australian people came over and negotiated an agreement with the government of the day, under which they were to make an arrangement with the government here with regard to the amount that was to be allowed to come in, and on that basis they did receive the right

to bring butter to Canada by paying a duty of 5 cents, and that has remained from that time down to tonight.


James MacKerras Macdonnell: The point I wanted to make clear is the one that I think the minister has made, namely, that the duty was established early in 1930 and has continued until 1949 unchanged. Is that correct?


James Garfield Gardiner: That is correct.


James MacKerras Macdonnell: Would the minister bring that to the attention of the hon. member for Temiscouata, please, because he made an argument which I thought was, to put it mildly, a little farfetched and based upon ignorance of that fact?


Jean-François Pouliot: It does not destroy my argument; my argument remains the same.


Percy Ellis Wright: The minister gave the basis upon which the Agricultural Prices Support Act is operating. He said that the department are taking the years 1943, 1944 and 1945 and are trying to establish a price for agricultural products in line with the cost of production and making a fair relationship with those years. Is that the basis that the department used in establishing the floors under the potatoes in the maritimes?


James Garfield Gardiner: 

BUSINESS OF THE HOUSE

Mr. Fournier (Hull):: Tomorrow we will resume the debate on the address and, if we dispose of it, we will call second reading of this bill concerning the agricultural products board.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to the order of the house passed on November 2, 1951.
[Stage Direction]
Wednesday, November 14, 1951